After a serial of trials which first began in April 2009, Wu Ying was sentenced to death with a two-year reprieve, according to the Zhejiang Higher People’s Court website.

Legal experts immediately interpreted the sentence as life imprisonment under China’s legal environment.

Wu’s former lawyer Zhang Yanfeng said to media, “She’s been sentenced to life imprisonment, barring any wrongdoing in the next two years.” Zhang said the verdict was expected as provincial high courts are subordinate to the Supreme People’s Court.

New York University law professor Jerome Cohen told The New York Times last month that the SPC’s decision “seems a typical Chinese judicial compromise between what those who call for the death penalty wanted and what Wu’s many supporters, both popular and professional, have called for”. The new suspended death sentence may be an attempt to maintain a similar balance, compared with the lighter sentences Cohen held out as another possible outcome. But human rights researcher Joshua Rosenzweig described it as “a gutless decision, one that ignores core problems with the case“. Although some supporters expressed satisfaction at Wu’s likely escape from execution, questions about uneven punishment and institutional problems remain. From Chuin-Wei Yap at China Real Time Report:

The case attracted widespread media attention for the severity of the sentence and the long-running campaign in China’s blogosphere to save her.

Many of her supporters wondered aloud why she was facing death when corrupt officials found guilty of similar crimes were often granted lighter sentences ….

For the public that’s kept the issue alive for more than three years, it’s a gratifying conclusion. “It’s not just Wu Ying,” Wang Shuo, a prominent magazine editor, wrote on the Twitter-like microblogging service Sina Weibo. “If it’s non-violent financial crime, no one should die.”

“Wu Ying was unlucky to run into hole in the legal system,” added another Sina Weibo user writing under the handle Chaoxin Xinzhixing. “When will China’s legal system be more robust, so the public can be convinced?”

Tea Leaf Nation’s survey of Sina Weibo reactions reveals similarly mixed views, and notes that over 3.5 million posts on the subject were culled from search results overnight [Update: TLN reports that many of the culled comments later re-appeared].

Many netizens hailed the result. @杭州恰恰 wrote, “This is…a victory for public opinion! [Responsiveness to] public opinion is progressing!” @洪陈纷纭 wrote: “The power of democracy; the power of Weibo.”

Unfortunately, many netizens felt their victory, if it was theirs at all, was a Pyrrhic one. @Q版温故‘s comment aptly captured netizen sentiment: “No matter what, the result is progress. But this time, the progress is mostly because of the contributions of public opinion, and not law itself.” Instead of law, many commenters perceived realpolitik, hard at work. @闫英士 opined, “The real meaning is this: The death sentence is to save face, the commutation is to quiet citizen rage. But it all has nothing to do with Wu Ying herself, and certainly doesn’t prove the independence of the so-called judiciary.”

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Post tags: death penalty, death sentence, execution, Jerome cohen, Supreme People's Court, Wang Shuo, Wu Ying, Zhejiang
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The SPC held that the facts of the case were clear, the evidence was sufficient, and the nature of the crime Wu committed had been determined accurately in the verdicts which were made by lower courts.

“Wu obtained an extremely large sum of money through fraudulent fundraising, causing severe losses to the victims, undermining the national financial order and creating extremely harmful effects, and thus entails a penalty in line with the law,” the SPC ruled ….

After fully considering all the factors, the SPC ruled that immediate execution may be inappropriate in the Wu case, overriding the death sentence.

While the ruling against “immediate” execution may sound ominous, a prominent expert told The New York Times that a lighter punishment now seems likely:

Jerome A. Cohen, a scholar of Chinese law at New York University, said in an e-mail interview that the supreme court could have resentenced Ms. Wu itself and imposed a new penalty, including death with a two-year suspension. That usually means that the convicted person will never be executed; after two years of good behavior, he or she might get a life sentence.

“But, by sending the case back for resentencing, it leaves open the possibility that Wu may immediately get an even lighter sentence than a two-year suspended death penalty, such as 15 years,” Professor Cohen said. “This seems a typical Chinese judicial compromise between what those who call for the death penalty wanted and what Wu’s many supporters, both popular and professional, have called for.”

China Real Time’s Josh Chin collected some comments on the role of public opinion from Sina Weibo:

“Weibo has saved Wu Ying” -– Xu Xiaoping, investor

“Is the Zhejiang High People’s Court not up to snuff, or did public opinion just trump the prosecutors?” –- Zhang Xiangtao, police officer

“The Supreme People’s Court refuses to approve the death penalty for Wuying – this is a victory for Chinese online public opinion. The power of public opinion definitely doesn’t manifest in correct ways all the time, but China needs a tutorial in how to respect it more. Like I’ve said before: Non-fatal crimes, no death penalty. This applies to everyone.” –-Hu Xijin, editor of the nationalist tabloid Global Times

The breadth of public support for the billionaire may, as The Economist noted in January, appear at odds with widespread resentment of China’s growing income inequality. But much of it was fuelled by Wu’s position on the wrong side of another chasm in Chinese society: between those with rank, connections and power, and those without. An in-depth account of Wu’s case at China Entrepreneur (via Sinocism) suggested that this was what left her vulnerable:

Wu Ying’s father Wu Yongzheng, her husband Zhou Hongbo and many creditors share one belief about this case: Wu Ying is in trouble because she has picked the wrong place at the wrong time. They say her fall is not caused by private lending, but by her shaky foundation of powerful connections in Dongyang ….

“Dongyang has made a lot of efforts to attract investors, but few chose to stay, because the business environment is no good here,” Wu Ying’s husband Zhou Hongbo said during a phone interview. He said that he was strongly against Wu Ying’s idea of trying to grow her businesses in Dongyang, because he believed that she was too weak to compete against the local powers.

Wu Yongzheng says that his daughter told him that she was threatened for refusing to pay bribes to the Lou family, which he calls the local power that has dominated Dongyang for years. He remembers the threat as if it were a line from a gangster film: Somebody said, “who cares Wu Ying is making so much noise now? Sooner or later I’d have her kneeling down before me.”

See also ‘Shadow Banks on Trial With China’s “Rich Sister”‘, on CDT.

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Post tags: capital punishment, death penalty, public opinion, sina weibo, Supreme People's Court, underground bank, Wu Ying, Zhejiang
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China’s manufacturing PMI improved from 51.0% in February to 53.1% in March, the highest in twelve months. The index has stayed above the critical level of 50% for four consecutive months, indicating that the underlying momentum of the manufacturing sector in China has continued to improve.

10 of the 11 sub-indices were higher than their respective levels in the previous month. The new orders index rose strongly by 4.1 ppt. while the new e  xport orders index gained 0.8 ppt. in March. The index readings indicated significant improvement in domestic demand. On the other hand, the input prices index went up from 54.0% in February to 55.9% in March, showing that upstream price pressures have increased.

The report conflicts with a separate and unofficial PMI reading also released on Sunday by HSBC, which showed that Chinese manufacturing activity had hit a four-month low. HSBC’s results, according to its chief China economist, “confirm a further slowdown of growth momentum” for the economy. From Bloomberg:

“As inflation pressures continue to ease, weaker export growth is likely to prompt further easing measures,” said Qu Hongbin, a Hong Kong-based economist for HSBC. “Once the easing measures filter through, growth is likely to start bottoming out in the second quarter and rebound modestly in the second half.”

HSBC forecasts reserve-ratio cuts of at least 1 percentage point in the first half as well as additional tax breaks and fiscal spending, Qu said.

The two reports sample different sections of China’s manufacturing landscape, with HSBC focusing on small and medium private businesses and the official report drawing data from large state-owned enterprises, and together they present what Forbes calls a “schizophrenic view of the national economy.“ But even as the official report recorded a steady expansion of output in 14 of the 21 industries surveyed, the state-run China Daily notes that the data does not mitigate the concerns of China’s economists:

The March PMI indicated that economic growth was rebounding at a faster pace thanks to the increase of new overseas orders amid the easing European debt crisis, according to Zhang Liqun, a senior economist at the Development Research Center of the State Council.

…

A statement from the central bank released on Saturday night showed that the government will maintain a prudent monetary policy.

“Although the European debt crisis is easing, there are still uncertainties in the global economy,” the statement said.

“But economic growth may still slow in the coming months because there is a gap between the PMI figure and the real business situation,” according to Zhang.

Others, including The Wall Street Journal’s Tom Orlik, pointed to seasonal factors in explaining the rebound in government PMI:

[...] On average since 2005, the CFLP’s PMI has bounced 3.1 points from February to March. That probably reflects failure to adjust for the impact of the lunar New Year, which has a negative impact on manufacturing in January or February, only for activity to rebound after the holiday is over.

The CFLP team says that they do seasonally adjust their data. But the repetition of the March bounce in the latest numbers suggests they might not be seasonally adjusting it enough.

One PMI in contractionary territory and the other bouncing on seasonal effects means the March data does not provide quite the reassurance on the trajectory of China’s growth the markets wanted to hear.

Regardless of the reason, Reuters reports that Sunday’s data did little to answer questions over the ability of Chinese policymakers to orchestrate a soft landing for the economy. And while the government pledges a “prudent monetary policy,” analysts and investors are left looking for more concrete signs of easing before accepting that growth has bottomed out in China.

Spotlight: Wenzhou

China’s state council approved a series of financial reforms as part of a pilot program in Wenzhou, an entrepreneurial hub which saw a number of private businesses suffer from funding shortages as the government tightened lending practices to cool inflation and an overheated property market. The trial policy will not only allow Wenzhou residents to make direct overseas investments, but the China Daily says that it will also help to standardize and regulate private fundraising in the credit-squeezed city:

Wenzhou was chosen because it is a prosperous center for small and medium-sized enterprises. But these smaller businesses have frequently complained about the difficulties they encounter trying to get loans from the banks following the credit tightening measures introduced by the central bank. The inability to access formal finance led to a proliferation of underground lending companies keen to fill the gap and lend money with exorbitant rates of interest.

These usurious rates led to many defaults when the economy started to slow down and government measures took the heat out of the property market. But there are still many practical problems that need to be solved to ensure the reform meets its objectives. For example, what role should the local authority play and how to design a mechanism that can give full play to the flexibility of private capital?

This flexibility is the advantage private finance companies have over their State-run counterparts. Private loan organizations can take various forms, such as equity funds, village banks, loan companies and capital management companies.

However, the government needs to establish strict entry requirements and transparency. All qualified private capitals should be registered and supervised, as the stability and order of a well-performing private finance market actually benefits both lenders and borrowers in the long run.

One Wenzhou official told The China Daily that the experiment could be expended to Shanghai and Tianjin, a scenario that would lend more weight to the policy. For now, according to The Wall Street Journal, finance and business leaders in Wenzhou welcomed the moves even as one outside observer cautioned that the pilot program represents a baby step in the grand scheme of policy reform that China must implement:

Eswar Prasad, a China scholar at the Brookings Institution, said that the government is concerned that the informal banking sector has been gaining so much steam that it could “pose risks to overall financial stability” by eating away at the depositor base of the big banks. That’s why, he said, “they are taking steps to bring these informal banks under the regulatory umbrella.”

Even if it begins to roll out some of these initiatives elsewhere, China still has major work to do. Mr. Prasad said China still must liberalize interest rates, so that China’s largest banks respond more to market forces, or proposed changes won’t be sufficient. “These steps to formalize the underground banking system are no substitute for more basic financial-sector reforms,” he said.

There was no indication from the State Council statement that the government was yet ready to move on interest-rate liberalization, even though central-bank Gov. Zhou Xiaochuan said recently that the time was “basically ripe” for such a move. The People’s Bank of China reports to the State Council.

Other News:

• China’s top priorities are to boost domestic consumption and increase imports from other Asian countries, Vice Premier Li Keqiang said in a speech on Monday.
• While Chinese banks struggle to reach official lending targets, Bloomberg reports that lenders also misclassified about 20 percent (or nearly $300 billion) of their outstanding loans to local governments. By errantly placing such loans in the safest category of lending, banks understated the risk that the corresponding borrowers would repay when the tide came out on local revenues.
• The Wall Street Journal has more on the Standard Chartered employee who has been held in Jiangsu province in connection with the disappearance of a ABC branch manager who fled the country last year with stolen funds.
• A report by consulting firm McKinsey & Co says that China will become the world’s second-largest market for retail banking by 2015.
• The arrests of the Kwok Brothers in Hong Kong cast a shadow over the city’s property sector, according to The Financial Times.
• China raised the quota of its foreign debt that it will allow foreign banks to hold, a move to enable overseas banks to more easily fund their operations on the mainland.
• Starbucks announced it will triple its China network in the next three years.

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Post tags: credit crisis, hard landing, lending, local government debt, manufacturing, monetary policy, PMI, private investment, Shanghai, soft landing, Tianjin, wenzhou, Zhejiang
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A week after Premier Wen Jiabao opened the National People’s Congress by lowering China’s 2012 GDP growth target, and just two days after China announced its largest trade deficit in more than a decade, People’s Bank of China (PBOC) Governor Zhou Xiaochuan claimed in his annual press conference on Monday that “big room” existed for further cuts to China’s reserve requirement ratio (RRR). He cautioned that any RRR adjustments, however, would not signal a broad change in monetary policy but rather an attempt to control market liquidity amid fluctuating capital flows. Reuters published a transcript of highlights from the press conference:

“Now banks’ reserve requirement ratio is just over 20 percent. We had low RRR, which was at 6 percent in the late 1990s.”

“There is a lot of room for RRR cuts. But we need to look at whether it’s necessary… and look at market liquidity. We cannot raise or cut RRR at will when we think there is room. We need to look at the liquidity condition, which is related to FX purchases and our international balance of payments.”

“The PBOC has always paid attention to price tools. It raised the benchmark interest rate five times from the fourth quarter of 2010 to the third quarter 2011. But when we use the tool, we need to consider some constrains. One consideration is the impact on capital flows.”

A closer look at capital flows in China would indicate a greater possibility of further RRR cuts. In addition to the massive trade deficit, Wednesday’s announcement by the Ministry of Commerce that foreign direct investment had fallen for the fourth straight month puts added pressure on China to generate liquidity from within. But despite both slower inflation and an RRR cut in February that was expected to boost domestic lending capacity by almost 400 billion yuan, China’s banks fell well short of new yuan loan targets in the first two months of 2012. Preliminary estimates of new yuan loans for March, reported today by the China Securities Journal, would represent an increase from February but still result in a first quarter total that falls short of the 2.4 trillion yuan target.

While a fresh RRR cut may be on the horizon, officials at China’s big four banks said Wednesday that the industry’s China Banking Regulatory Commission (CBRC) had already taken other steps to ease lending capacity. From Bloomberg:

The regulator is letting the lenders use more of their deposits to make loans, the bank officials said, after China’s exports, industrial production and retail sales declined in the first two months. Loan growth has slowed this year as depositors seeking higher returns removed money from savings accounts and the economy’s expansion at the smallest pace in 10 quarters curtailed demand.

The banking regulator is increasing the 2012 loan-to- deposit ratio target for Industrial & Commercial Bank of China Ltd. to 63 percent, an official at the Beijing-based lender said, declining to be identified as the matter is private and yet to be finalized. He declined to provide last year’s figure. The measure was also raised at two rivals, officials at those banks said, declining to provide their 2012 targets.

“Deposit growth has been sluggish since late 2011 and severely constrained banks’ lending capacity this year,” said James Liu, a Hong Kong-based analyst at CIMB Securities HK Ltd. “The regulator wants to alleviate the problem by giving banks adequate resources to lend.”

Another method by which China may look to release more capital into the financial system, at least on a more legal basis, is through legitimizing its informal lending system. The South China Morning Post reported on Monday that delegates to the annual Chinese People’s Consultative Conference (CPPCC), which took place alongside the NPC in Beijing, had called for an end to underground or shadow lending, which may make up half of all new loans in China as the big state-owned banks chiefly lend money to state-owned enterprises. Entrepreneurs in Zhejiang, which has been the epicenter for the funding woes that have befallen private enterprises in China over the past year, echoed the calls of public officials.

Wen Jiabao’s comments in his wide-ranging closing press conference at the NPC indicate that the central government may be listening, according to The Wall Street Journal:

He said that China’s central bank and the China Banking Regulatory Commission are considering launching trial reforms of informal lending in the Chinese city of Wenzhou, a city with a reputation as a center of private enterprise and informal lending.

“We should guide and permit informal capital into the financial arena, standardizing it and bringing it into the open, encouraging its development and strengthening its supervision,” said Mr. Wen, who was speaking at a news conference marking the conclusion of the annual meeting of China’s legislature. He also said informal loans should have clear legal safeguards.

Wenzhou, in Zhejiang province, brought the funding pressures of China’s private sector into sharp relief late last year when Beijing tightened monetary conditions, making it even more difficult for the city’s small manufacturers to access credit or repay high rates of interest.

More than a dozen business owners shut their factories and skipped town, leaving their creditors behind, according to state media reports.

Spotlight: Yuan Near Equilibrium?

Of the other topics covered by Zhou Xiaochuan in his Monday press conference, observers also focused on his comments about China’s yuan exchange rate. Here, the Financial Times reports that Zhou stopped short of making any bold statements about renminbi appreciation going forward:

The central bank governor also dodged a question about whether the central bank had decided to halt the appreciation of China’s currency. “Generally speaking, as the renminbi exchange rate gets closer to the equilibrium point the market supply and demand should take a greater role – that is to say we should allow and encourage a greater role for market supply and demand,” he added.

…

A growing number of analysts point to China’s trade data, cross-border capital flows and slower accumulation of foreign exchange reserves as evidence that the renminbi is no longer grossly undervalued. “Fundamental surpluses have continued to narrow and the renminbi is closer to the equilibrium value than ever before,” said Paul Mackel, head of Asian currency research at HSBC. “This structural change in China’s balance of payments has profound implications for the currency.”

During his press conference on Wednesday, however, Wen Jiabao went a step further in suggesting that the renminbi may have already reached equilibrium:

The yuan has gained 30 percent in value in real terms since 2005 and has moved up and down since September in Hong Kong trading of nondeliverable forward contracts, Premier Wen Jiabao said. Such contracts are used by traders to bet on movement of currencies that are not freely traded. They are settled in dollars or other hard currencies.

“That shows that the renminbi exchange rate may possibly have reached an equilibrium exchange rate,” Wen said at a news conference at the end of China’s annual legislative session.

Wen pledged to create a more flexible, market-based exchange rate system, saying, “We welcome greater elasticity of the renminbi exchange rate.”

Time for Interest Rate Reform?

Reuters reports that public anger about rising bank profits, which mainly stems from the robust spread they earn by capping interest rates while setting a floor on lending rates, has put bank executives on the defensive while bolstering support for interest rate liberalization. The always-candid Li Daokui, who recently resigned his post as an adviser to the PBOC, said at a Saturday forum that enough support may exist for such reform. From The Wall Street Journal:

“We need market-oriented interest rates,” he said, adding that the time is right for such a move as part of an overall economic restructuring, which is now the key task for China.

“Banks have high profits, and we don’t need to worry about protecting them. They are like dinosaurs,” he said, suggesting that these “dinosaurs” were big but weren’t about to disappear.

Interest-rate liberalization has long been discussed for China’s state-managed financial sector, which is dominated by state-run banks and which relies on interest rates that are generally set under guidelines from the central bank.

But Mr. Li suggested that circumstances may be changing.

“I think there is tremendous support…within government for this.”

See also a China Daily video interview with Li on the subject, in which he says commercial banks should “lose weight.”

Premier-in-Waiting Touts Reform

After outgoing Premier Wen Jiabao used his Monday NPC press conference to push for bold reforms, Premier-in-waiting Li Keqiang sang a similar tune during a Sunday speech, promising flexible policies and structural reforms to keep up with an evolving economy. From Reuters:

“China has reached a crucial period in changing its economic model and (change) cannot be delayed. Reforms have entered a tough stage,” Li said, echoing comments made by Wen last week.

“We will make policies more targeted, flexible and forward-looking to maintain relatively fast economic growth and keep price levels basically stable,” Li said in a speech at an economic policy conference, attended by top Chinese officials, the head of the IMF and dozens of foreign business leaders.

He said China would “deepen reforms on taxes, the financial sector, prices, income distribution and seek breakthroughs in key areas to let market forces play a bigger role in resource allocation”.

Other News

• Chinese stocks ended the week on a high note, buoyed by consumer companies on speculation that they will benefit from government emphasis on generating domestic demand.
• The chairman of both China National Petroleum Corp (CNPC) and PetroChina told reporters on the sidelines of the NPC that China should raise fuel prices following the recent surge in the price of crude oil, according to Reuters. The former head of China’s National Energy Administration, however, says the time is not right and any hike in fuel prices will hurt Chinese consumers.
• Tianjin boasted the highest GDP per capita (US$10,783) of China’s 31 provincial regions in 2011, beating out Shanghai and Beijing, according to The Global Times.
• Rising green onion prices are causing a stir in some parts of China.
• China set ambitious shale gas output targets in a development plan released Friday by the government. The plan, which runs through 2020, urges local companies to work with foreign companies as they exploit China’s national gas resources.
• The Ministry of Commerce said China must “step up its efforts” to secure free trade agreements with the likes of Japan, South Korea and other neighbors in Asia Pacific. Meanwhile, a former MOC official asked why China hasn’t pursued a free trade agreement with the United States yet.
• U.K. banks are lobbying the Bank of England to sign a currency-swap agreement with the People’s Bank of China, in an effort to make it easier for the banks to facilitate yuan liquidity. China has signed 1.3 trillion yuan of currency-swap deals with 14 countries and territories, according to The Wall Street Journal.

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Post tags: CDT Money, China Banking Regulatory Commission, Chinese People's Consultative Conference, exchange rate, free trade agreement, Fuel Prices, hard landing, interest rates, Japan, lending targets, Li Daokui, Li Keqiang, Ministry of Commerce, monetary policy, National People's Congress, peoples bank of china, reform, Renminbi appreciation, reserve requirement ratio, shadow lending, shale gas, south korea, Tianjin, United Kingdom, United States, Wen Jiabao, wenzhou, yuan loans, Zhejiang, zhou xiaochuan
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Earlier this month, people in Panhe marched to protest what they said was the theft by local leaders of communal lands. The complaints were met by a crackdown. Police and plainclothes security men hauled away at least 30 people. Villagers said the roundup targeted the protest organizers they’d selected to negotiate with the government.

“The officials took away all of the young people who were getting on the Internet,” said one farmer, a 50-year-old man who like many interviewed spoke on the condition of anonymity for fear of arrest.

Panhe has become another in a long list of Chinese villages where locals say corrupt officials and well-connected businessmen conspired to steal land or otherwise rob the poor.

When residents stage demonstrations in hopes of gaining justice, the main leaders are often whisked away in police cars. After the government makes perfunctory promises, all goes back to the way it was before.

Panhe has seemed the most likely location for “Wukan 2.0″ after villagers claimed earlier this month that they had modeled their tactics after Wukan. The Diplomat’s Ai-Shan Lu, however, echoes Lasseter’s claims that Guangdong party secretary Wang Yang’s handling of the situation in Wukan appears to be the exception rather than the rule thus far:

In sharp contrast with Wang’s handling of the dispute, local government officials in Shanwei and Lufeng first labeled the incident as a “riot incited by foreign subversives.” In line with this thinking, the Financial Times quoted an unnamed senior Chinese leader stating: “it would be better for a clear directive from the central authorities to over-react rather than to fall short.” According to a member of the Chinese People’s Political Consultative Conference, other provincial officials complained that Wang set a terrible precedent since other people in protests could demand a similar response. 

…

During a visit to a village in Guangzhou on February 4, Chinese Premier Wen Jiabao proclaimed that “farmers’ rights must be protected,” and in response to widespread dissatisfaction with local officials Wen emphasized the importance of “maintaining direct elections at the village-level.”

Wen’s statements were widely seen as an indication of high-level support for Wang’s practice in Wukan. So, does the government’s handling of the Wukan incident indicate that the CCP’s leadership is becoming more open-minded toward democracy? Although protests against village officials occurred in several rural villages following the Wukan incident, none successfully appealed for direct elections to replace incumbent village chiefs (as in Wukan). So Wukan appears to be more of an exception rather than the rule thus far. In fact, most uprisings were suppressed by local governments, except for any provincial intervention.

 See also CDT coverage of foreign journalists attacked by plainclothes henchmen while investigating the land grab protests in Panhe earlier this month.

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Post tags: crackdown, Guangdong, land grabsm, Panhe, police violence, protests, Wang Yang, Wukan, Zhejiang
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France 24′s Baptiste Fallevoz and his Chinese fixer Jack Zhang tell Shanghaiist they were driving toward the village when they noticed a black car following them. After trying to evade the car and failing, they decided to just ignore it and continue towards the village.

As they approached Panhe, they passed four or five cars parked on the shoulder with men waiting nearby. They saw the men answer their cell phones, hurry into their cars, and join the black car behind them. When Zhang gradually slowed down for a truck crossing in front of them, they were suddenly hit from behind.

About 20-30 plainclothes thugs then surrounded their car and pulled Zhang out, trying to grab his video camera from him (he was not filming at the time). When they got the camera, they threw it on the ground and smashed it in front of him. They then continued to attempt to attack Zhang, hitting him on the head with the camera until he started bleeding.

The second journalist, Remko Tanis from the Netherlands, had a similar encounter before escaping to Wenzhou to write his story. Tanis’ photos from Flickr are regularly featured on CDT. The Committee to Protect Journalists interviewed Tanis about the attack.

The land dispute in Panhe dates back several years, according to The Global Times, when local officials began to gradually seize villagers’ land and sell it to property developers. Villagers elected representatives to negotiate with the government and demand compensation last summer, and say they have received nothing despite claims by some that the settlement payments are in process. The Global Times reported today that the protests had come to an end after security forces detained several people, according to locals:

Two villagers, Lü Xisi, 49, and Lü Yangyu, in his 40s, were taken away by “plainclothes agents” on Wednesday night and yesterday morning respectively, according to a 51-year-old Panhe villager surnamed Lü,

Three protests over land disputes were staged on February 1, 3 and 5. Several dozens of people who took part were detained on Tuesday, local villagers told the Global Times.

According to a notice issued by the a local official news website, the local authorities have paid close attention to the land dispute since the first protest.

A team was soon established by the county government to investigate. The team met with village representatives to address any reasonable demands made, the notice said.

But a few villagers incited others to destroy public property and establish roadblocks, which seriously disrupted social order. Three suspects had been arrested in connection with these events Wednesday, according to the notice.

Observers have referred to the ongoing situation in Panhe as “Wukan 2.0,” after protesters said they modeled their tactics after the Guangdong village which evicted local Communist Party authorities over similar complaints late last year.

Read more about foreign correspondents in China and about violence against journalists, via CDT.

© Scott Greene for China Digital Times (CDT), 2012. | Permalink | One comment | Add to del.icio.us
Post tags: corruption, foreign correspondents, land grabs, Panhe, police violence, protests, thugs, violence against journalists, Wukan, Zhejiang
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[Lu Yeqin, Villager]:
“Officials from the village sold land. This land originally belonged to the villagers. After it was sold, the [villagers] were not given any money for it. The villagers are upset, and after all, this land was passed down through their family business. They rely on the land for their livelihood, but now it has been sold.”

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

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

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

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

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

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

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

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

© Scott Greene for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: chinese communist party, corruption, Guangdong, land grab protests, Panhe, sina weibo, social media, Wukan, Zhejiang
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Hu Xijin, Chief Editor of the party newspaper Global Times, posted on his Sina Weibo account about an editorial on Oct. 28 titled “Whatever the reason, perpetrators of violence must be harshly punished.” Readers left angry comments about Hu’s “double standard” for protesters and government officials. Many compare the Huzhou riots to the assault on ordinary citizens attempting to visit Chen Guangcheng, an activist who has remained under house arrest since he finished serving a four-year prison sentence in September 2010.

Below are the comments on Sina Weibo responding to Hu.

XuwuSky99: I didn’t dare to comment before learning the truth of the incident, so I tried to search “Huzhou Tax Riot” on Sina Weibo, and… [“Huzhou Tax Riot” (湖州抗税) became a banned Sina Weibo search term soon after the riot.]
虚无天空99：在未了解事实真相之前我不敢妄加评论，于是我在微博上搜索“湖州抗税”，结果…… [“湖州抗税” is a banned Sina Weibo search keyword!]

Langligelang: I can’t even find the right word to describe you.
啷晲咯啷：找不到合适的形容来形容你

WallYiyuan: No taxation without representation? Not to mention that we have no rights and are still forced to pay more taxes? If we don’t cooperate, we’re just compelled [to pay]?
烦墙一员：无权利不纳税？何况没权利，还被逼涨税？不配合，就强制？

DandingdeBiange: There’ll only be fewer and fewer people who believe in “Fifty Cents“. What a pity, just like the man in a case…
淡定的变革：相信五毛的人只会越来越少，真可怜，活在套子里的人

Papillonn: Are you afraid?
Papillonn：怕了？

Kaqiushadehongqiuku: I support the protests against heavy taxation.
喀秋莎的红秋裤：支持反抗重赋税

M—–O: It’s the right thing to say, but the order is reversed!!! Government officials should take responsibility first. You can’t chop off the heads of ordinary citizens at the first sign of a mistake… Is “serving the people” just a load of crap?
M—–O：话是对的，顺序错了！！！先对官员追责才是正理，不能一出错就拿老百姓开刀…………为人民服务是用来当屁放的吗？

Amen’s Disciple: “The law is not a shield.”
阿门的信徒：“法律不是挡箭牌”

Fan-tian: It seems that you’re punishing the guilty and the innocent indiscriminately while putting on an objective face. You know exactly where your butt is parked: who’s winning with whom?
范-昀：貌似各打五十大板，装出客观的面目。你的屁股坐在哪里其实你很淸楚：谁赢跟谁.

ShuishouxingbadaRhp: rpReply to @CaoJiansheng: It’s as if a man was bitten by a tiger and a group of people then attack the tiger, only for those people to be punished instead of the tiger! What’s going on? And why?
水手辛巴达Rhp：回复@曹健生:犹如老虎咬伤了人，人们把它给打了，最后竟然抓打虎的人，而不对老虎进行严惩！那是什么？又是为什么？

Ziyou-SH: By the looks of these comments, the public’s praise for Editor Hu is not so good.
子由-SH：看了下评论，胡主编的口碑可不太好

PunishGuangcheng: The major and minor issues here are getting confused. The government hasn’t been held accountable and officials haven’t been punished. Even killing all the troublemakers wouldn’t solve anything. Before talking to the people about the law, shouldn’t the government abide by the law first?
刑光誠：主次不分，政府不被問責，官員不遭懲處，把鬧事者殺光也無濟於事。在跟人民談法律之前，政府是否應該自己守法先？

YeXiaoting: How have the two officials mentioned in the last two sentences been penalized?
叶潇亭：对后两句提到的官员做何惩罚？

ZhongweiLuowen: On July 23 I didn’t hear you call for accountability, I only heard you call for everyone to continue supporting the high-speed rail.
中尉罗文：7.23也没见你这么强烈的呼吁追责，当时我可是只看到你呼吁大家要继续支持高铁

CoffeeAddictLife: Editor Hu, let’s see if you can gather a crowd of hundreds.
咖啡上瘾的日子：胡编，看看你有本事聚集几百人吗

BlackClothesClerk (黑大衣总书记)：go fuck yourself, asshole

HumbleThoughts: Editor Hu has turned a blind eye to the violent crackdown of Chen Guangcheng’s visitors!!!! Do you mean to say the violence here shouldn’t be investigated? Go back to your shitty Global Times.
淡泊相思：胡编对于探望陈光诚者受的暴力却视而不见！！！！难道在这里暴力不应该受到追究吗？去你的环球屎报

ShaLao’er: You’ve blocked every route. There’s nowhere left to go! And under these circumstances you add such heavy taxes. I support the protesters.
沙老贰：你们把路都占了，让别人无路可走！！这种环境下还加这么重的税，支持这些抗税者

MaiErsi: Are you scared? Though you may jump for joy today, tomorrow you’ll have bills to pay. Isn’t violent revolution the most effective tool of the proletariat? [Do you remember] who said that? You’re from the propertied class, aren’t you?
卖饵丝：你怕了吧？别看今天跳得欢，小心日后拉清单。无产阶级解放自己的最有效手段不是暴力革命么？这是谁说的？难道你是有产阶级？

vBabylonv: People curse Chief Hu’s words most of the time. For the minority, does Chief Hu command the truth? Over more than half a year of examination, Chief Hu’s thinking still seems to be nothing special…
v巴比伦v：胡总的话，绝大多数时候大家都骂，是不是真理掌握在少数人你胡总手里？半年多的观察，胡总心智确实一般……

Wu Youmiao Ponders Chinese Higher Education: Fifty-Cent Hu, when injustice becomes the law, resistance becomes an obligation. Get it?
吴有淼思考中国高等教育：胡五毛 当不义成为法律时 抵抗就成为义务 你懂不 ？

QinweiViviXie (沁薇ViviXie)：sure… but the problem is that the Global Times is just full of bullshit, nobody even cares what you guys say seriously dude… full of propaganda bs…

ChenfengShuming: A Global Times editorial published on the 28th said: “Whatever the reason, perpetrators of violence must be harshly punished.” This means that no matter how I bribe, break the law, do violence, or steal… You want a protest dealt with according to the law.
尘封宿命：环球时报28日发社评：无论何因，施暴者都应依法受惩。—–意思就是无论我如何贪赃、枉法、施暴、掠夺。。。你要反抗就都应依法受惩。

Wen-Ruhua: You’re always talking about the present conditions! The people are just a bunch of bums, even individual rights aren’t protected. What present conditions are you talking about?
温-儒华：总是谈大局!老百姓一介P民，连个人利益都没有保障，谈何大局？

Baozoulaohu: Bullshit.
暴走老胡：放屁

MayIBeAngry: I’ll never read your retarded, brain-washed Global Times [again]
可以不可以愤怒: 永远不会看你的弱智洗脑环球时报

ZhangZhihan5028: When the people violate the law you lecture them on the law, but when the country disregards the law and uses violence on the people, you just talk about the state of the nation. (Propaganda bullshit should not be exploited by Western influence.)
张智涵5028：当老百姓违法的时候你给他讲法律，可是当国家带头无法无天的对民众施暴的时候，你却对他讲国情（宣传狗屁的不要被西方势力利用之类）

madewildatheart: Forward this weibo: If you talk to him about the law, he’ll violate you; if you violate him, he’ll talk to you about the law.
madewildatheart：转发此微博:你和他讲法律，他跟你耍流氓；你和他耍流氓，他跟你讲法律

EastSpringWaterggp: The state has not yet established transparency, nor does it allow citizens to restrict the government’s abuse of power or to ensure the impartiality of the courts. What right do you have to invoke the law so sanctimoniously? How can matters proceed according to the law?
东流之春水ggp：国家未建立让政府权力公开透明,没有让公民们用自己的权利制约政府滥用公权力,保证司法公正,有什么资格在这里道貌岸然的口口声的喊法律,依法如何

ResoluteRocknRoll: Whenever anything happens the first thing the authorities do is cut off the information flow. Then they send the Fifty Centers to sway public opinion! It goes like this again and again.
毅起摇滚：每次出事都是官方先封锁消息.再派一些五毛党媒企图扭转舆论！反反复复都是这样的

XiangwangShaolin: Always invoke the rights of the state to violate the rights of the individual, did I get that right?
香王少林：总是以国家权利为借侵犯个人权利，是这意思吗？

Shrew’s Dad Chen Chao: Oh yes, right, “Whatever the reason, perpetrators of violence must be harshly punished.” May I ask when those brutes in “East Skeleton” (Dongshigu) will be punished?
悍妞她爸陈超：嗯，对的，无论何因，施暴者都应依法受惩。请问何时惩罚东尸骨的施暴者？

Zhang Family Circle: You let the officials set a fire, but forbid the people to light a lamp! Everyone’s just venting their dissatisfaction with the government. They haven’t torn down any houses, occupied any land, and they certainly haven’t shut anyone in the insane asylum~The party’s paper really is just the party’s paper. It makes a farce of life, just like CCTV news!
張家大圓子：只准州官放火，不许百姓点灯！大家只是发泄对政府的不满，可没有强拆人家房，强占人家地，更没有把人关进精神病院哦～党报到底是党报，和新闻联播一样全当生活笑料！

IdealWings: You little shit, you say nothing about the government collecting the machinery head tax, nothing about the machinery head tax doubling. That’s what lead to the tax protest. You’ve twisted the story，you dog-banger!
理想之翅：你这个狗屎，不说政府收机头税，不说机头税增加了一倍，才导致了抗税事件，歪曲报道，你个狗日的！

XiaojieziJ: Please find the real thugs.
小杰子J：请找出真正的施暴者

duan003: Forward this weibo: Look at how you treat the cases of Linyi and Huzhou. Is the law a waistband you can relax and tighten?
duan003：转发此微博:看看你就临沂和湖州的两套标准，法律是裤腰带么，可松可紧？

boao_zhong: If you you could look at the violence government-hired gangsters have visited on Chen Guangcheng and say, “Whatever the reason, perpetrators of violence must be harshly punished,” and don’t just say it’s the village environment and the state of the country [that's to blame], then I would believe you.
boao_zhong：你要是能在陈光诚或去看他的人被政府雇佣的匪徒施暴时，也能说句“无论何因，施暴者都应受严惩”，而不是什么农村环境，国情论，我就信你。

Matt’s Bacon: Why haven’t they punished the people who beat up Chen Guangcheng? Where did you come up with your double standard?
马修腊肉：对陈光诚施暴的为什么可以不受严惩？？？你的双重标准是如何制定的？

IsAnyoneStillNamedLiYaning: Why violence? Because are other routes have dead-ended.
还有人叫李亚宁吗：为什么会发生暴力?因为正常途径堵死了。

PoetKnight: It’s all over. There’s no one left to trust…
诗剑侠：完了, 又没人信了…

© Anne.Henochowicz for China Digital Times (CDT), 2011. | Permalink | No comment | Add to del.icio.us
Post tags: Global Times, Hu xijin, protest, taxes, violence, Zhejiang
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The report did not explain why the business owner did not want to pay his taxes. But a local doctor surnamed Zhao contacted by The Associated Press said he had heard that town authorities were imposing a higher tax rate for migrant businesses than for local ones, causing unhappiness among the group who were from neighboring Anhui province.

The Huzhou Online said police had detained five suspects and that another 23 suspects were being held as part of the investigation.

Around 100 protesters swarmed toward the township government offices, hurled rocks and destroyed street lamps, smashing the windows of more than 30 private cars, said the Zhejiang Online, a provincial news website. It added that several police and urban management officers were injured.

Protesters also smashed an Audi car, whose driver ran the vehicle into the group, knocking down 10 people, the Zhejiang Online said. All 10 were hospitalized and the driver was being held by police, it said.

Reuters published a set of photos from the scene, and reported that searches for Zhili on Sina Weibo had been blocked, though photos posted of the riots could be found through other search terms. The riots indicate growing agitation among migrants, middle- and lower-class households and private businesses in a Chinese economy marked by stagnant incomes and high inflation. From The Wall Street Journal:

The protests come as smaller private-sector firms, many of which are concentrated in the area near Shanghai, have been squeezed by government efforts to tap the brakes on economic growth in order to tame inflation. Those efforts have limited credit for some small firms, which in turn prompted new government measures this month to help small- and medium-size businesses.

See also previous CDT coverage of the credit squeeze underway in the mid-section of China’s economy and the surge in “mass incidents” as a means to address grievances.

Update: The Zhili government announced Friday it will rescind the tax in question as more details surrounding the cause of the riots emerged. From The Wall Street Journal:

According to people interviewed by telephone in Zhili, the disturbance followed aggressive collection of new charges for the use of machines used to make children’s wear, the town’s mainstay product. The tax was targeted at small, independent workshops that often aren’t licensed and are manned mostly by migrant laborers who earn money per piece produced.

They said workshop managers were being charged between 300 yuan (about $48) and 600 yuan for each machine used, in what Chinese discussing the matter online called the “sewing-machine tax.” It amounts to about twice as much as was collected in the past. An unidentified man who apparently objected to the payment rallied others to join this week’s protest, locals said.

…

China’s economy is slowing and the Zhili government’s pullback on tax levies reflects a strategy Beijing is increasingly likely to take to soften pain of the deceleration, according to analysts. This week, the central government said it would reduce double-taxation of certain transportation in China, a move expected to encourage some business activity and amounts to a philosophical change, according to analysts.

This tax reform is part of the structural tax reduction, and thus can be viewed as a signal of expansionary fiscal policy,” Minggao Shen, a Citigroup economist said in a research note Friday.The influence on China of a weak global economy is clearly being seen in Zhejiang province, home to nearly 50 million people and by some measures the country’s wealthiest region. Nearly 12% of China’s total exports came from the province in August. But Zhejiang factory owners say their already-thin margins are disappearing.

© Scott Greene for China Digital Times (CDT), 2011. | Permalink | No comment | Add to del.icio.us
Post tags: Chinese migrants, inflation, riots, sina weibo, taxes, Zhejiang
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Muifa was downgraded from a typhoon to a severe tropical storm on Monday but was still causing huge disruption.

It is now expected to make landfall somewhere between Zhuanghe in Liaoning province and western North Korea on Monday evening.

Qingdao city in Shandong province shut its beaches as the storm swept by ….

China’s official Xinhua news agency said the storm had destroyed nearly 170 homes and caused damage estimated at 1.9bn yuan ($290m; £176m) in the eastern province of Zhejiang.

Xinhua reports on storm defence efforts at a vulnerable chemical plant in Dalian:

Workers driving forklifts on Monday rushed to repair a dike guarding a chemical plant breached by powerful waves triggered by an approaching tropical storm in Northeast China over fears of a toxic chemical spill.

Waves as high as 20 meters, fueled by strong winds, broke the dike in Jinshan Industrial Zone of Dalian city, at about 10:30 am, threatening to hit the compound of Fujiahua chemical plant where toxic chemicals were held, said soldiers who participated in the rescue.

Residents in nearby areas are being evacuated.

Update: The Associated Press reports that the situation at the Fujiahua plant appears to be under control:

A tropical storm lashed northeastern China and the Korean peninsula on Monday, but fears of a toxic chemical spill appeared to have eased after a breached dike guarding a chemical plant was reinforced ….

An official from Dalian’s Propaganda Department referred to two reports on a Dalian news website that said the danger had been controlled and the dike was being reinforced with large stones and concrete. The official gave only his surname, Zhang, as is common with Chinese officials.

The U.S. Embassy, however, urged Americans in the area to “take all necessary precautions.”

© Samuel Wade for China Digital Times (CDT), 2011. | Permalink | No comment | Add to del.icio.us
Post tags: chemical spill, dalian, Liaoning, Shandong, storms, typhoon, Zhejiang
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