CHINA – POLITICS

Edward Snowden

1. Latest: Snowden applied for political asylum in at least 19 countries including China.
2. Earlier in last week of June: A surge in criticism of the US by the mainland press followed after Snowden’s departure from Hong Kong, provoking parallel response from the US press. National defense minister Colonel Yang Yujun spoke at a news conference: ““棱镜门”事件正如同一面多棱镜，折射出有关国家在网络安全方面的真实面目和虚伪言行，这其中的是非曲直自有公论…一方面滥用信息技术优势谋求一己之私，另一方面又对别国无端指责，这种双重标准的做法无益于网络空间的和平与安全”
   1. NYT retorts: Latest official remarks “appear aimed at persuading Chinese citizens that their government holds the moral high ground in Internet issues. China heavily censors and monitors the Internet.” White House: “serious setback” in relations
   2. Kerry’s latest “softening” on China rhetoric
3. The Snowden case on HK-mainland relations: Beijing most concerned with stability of relations with US, hence “relieved” to see Snowden gone although domestic public opinion widely regards Snowden as a hero and wants to keep him.
4. The Atlantic: “Beijing is no doubt pleased with how everything has turned out. But in the long term, Hong Kong’s growing sense of political identity is an issue that will keep China’s Communist leaders awake at night. Today’s defiance of the United States is tomorrow’s with a nearer, more closely connected, neighbor.”

Reaction from the Chinese press

1. Global Times: “China has to catch up with the US on network security technology to completely reverse the current international climate of opinion in this regard and restore China’s image, as it is one of the main victims of US cyber attacks. China should form its own network security forces in a just and forceful manner, and fully enhance its capability in safeguarding network security.”
2. Caixin, adopting more reformist rhetoric: “Hopefully, the Prism program and Edward Snowden’s revelations will awake the sleeping netizens of the world and make them understand that in the virtual environment, they are at an absolute disadvantage with those in power. We urgently need to set up limits, to balance and to hold accountable our rulers.”

New rectification campaign?

1. June 18: 党的群众路线教育实践活动工作会议
   1. Full text of Xi Jinping’s speech
   2. “我们必须看到，面对世情、国情、党情的深刻变化，精神懈怠危险、能力不足危险、脱离群众危险、消极腐败危险更加尖 锐地摆在全党面前，党内脱离群众的现象大量存在，集中表现在形式主义、官僚主义、享乐主义和奢靡之风这“四风”上。我们要对作风之弊、行为之垢来一次大排查、大检修、大扫除。”
   3. “以“照镜子、正衣冠、洗洗澡、治治病”为总要求。照镜子，主要是以党章为镜，对照党的纪律、群众期盼、先进典型， 对照改进作风要求，在宗旨意识、工作作风、廉洁自律上摆问题、找差距、明方向。正衣冠，主要是按照为民务实清廉的要求，勇于正视缺点和不足，严明党的纪律 特别是政治纪律，敢于触及思想、正视矛盾和问题，从自己做起，从现在改起，端正行为，自觉把党性修养正一正、把党员义务理一理、把党纪国法紧一紧，保持共 产党人良好形象。洗洗澡，主要是以整风的精神开展批评和自我批评，深入分析发生问题的原因，清洗思想和行为上的灰尘，保持共产党人政治本色。治治病，主要 是坚持惩前毖后、治病救人方针，区别情况、对症下药，对作风方面存在问题的党员、干部进行教育提醒，对问题严重的进行查处，对不正之风和突出问题进行专项治理。”
2. Cheng Ming July feature: 新的整風運動：
   1. Referencing four previous campaigns (Yan’an, 1957, 1959, 1989): “這又是一次在三叉路口跟前中共決定自己走向的一次整黨運動… 現在中共面臨的是這樣兩條路：一是繼續沿著鄧小平路線，也就是「高壓維穩」；另一條是開始政治體制改革，恢復中斷了二十多年的胡耀邦全面改革的路線。”
3. Zhu Jianguo on the campaign’s implication: pronouncement of death sentence on civil society
   1. “為何「群教」開始，中國「公民社會」就夢斷深圳？因為「群教」的核心，是讓中國人重新倒退到「群眾」階段，永遠等待父母官為民作主，永不能真正享受公民民主自由權利。”
   2. “習何以親「群眾」遠「公民」？也許因為憲法賦予「公民」許多明確的自由民主權利，而這些權利是中共被迫寫上裝門面的，從不想真正實行。”
   3. “這集中解決「四風」的「群教」運動，不就是文革前夕「清政治、清思想、清組織、清經濟」的社會主義教育運動（「四清」運動）麼？所謂「照鏡子、正衣冠、洗洗澡、治治病」，新「四清」也。”
4. To look out for: South Review’s July 3 issue: 执政党整风

Politics update

1. Lei Zhengfu, former official who was embroiled in sex tape scandal, is jailed for 13 years for accepting bribes: “以受贿罪判处雷政富有期徒刑十三年，剥夺政治权利三年，并处没收个人财产30万元”

CHINA – ECONOMY

Financial reform

1. The PBOC engineered a massive credit squeeze to assert its determination to crack down on the shadow banking sector, which comprised of problematic wealth management products used by banks to refinance dodgy borrowers (municipal governments and real estate developers). As a result short-term borrowing costs soar to extraordinary levels and raised fear of a lasting credit crunch.
2. Caixin: A number of banks also temporarily halted lending to businesses and individuals due to mounting pressure from liquidity shortage. Earlier in March regulator has also put quantitative restrictions on banks’ wealth management business to limit risk.
3. The credit squeeze “made for a bracing week of financial drama — and it signaled that China’s leaders are not averse to causing a bit of drama to underscore their desire for reform in the financial industry”
4. Global Times: “The central bank’s words and actions convinced a growing number of analysts that while the worst-case scenario of a credit freeze and banking crisis seemed very distant, the era of rapid growth fueled by cheap credit was also over.”
5. Newly released figures by the National Audit Office on local government debt:
   • Focused on 15 provincial governments and their capital cities: “by the end of last year, the direct liabilities, guaranteed debt and indirect liabilities of all the 36 local governments exceeded 3.8 trillion yuan, up nearly 13 percent from two years ago.”
   • Auditors listed a number of major concerns:
     1. Rapid growth of debt
     2. Linkage to infrastructure: overdue debt related to highways and secondary roads exceeded 1.7 billion and 3.1 billion yuan last year
     3. Heavy reliance on land sales revenue
     4. Fundraising fronts: Some local governments were found circumventing restrictions and borrowing through channels e.g. trust loans, WMPs, illegal fundraising etc.
     5. Ability to pay back: Some financing platforms were unable to pay back debt on their own
     6. Ad-hoc process: Many local governments have yet to establish a standardized budgeting and risk monitoring system for their debt.

CHINA – SOCIETY

Ethnic tensions

1. Latest riots in Xinjiang:
   1. Turpan riots with death toll rising to 35: Rioters killed 24 people (of which 16 were from the Uyghur ethnic group), while police killed 11 of the attackers and captured 4, according to state media.
   2. Days before fourth anniversary of violent riots in Urumqi another riot broke out in Hotan Prefecture
   3. Global Times claims that Uyghur terrorists are finding “training” in Syria: “An anti-terrorism official told the Global Times in an exclusive interview that about 100 people like Memeti Aili had travelled to Syria to join the fighting alongside Syrian rebels since last year… ‘Their purpose is to overcome their fears, improve their fighting skills and gain experience in carrying out terror attacks’.”
2. New Human Rights Watch report on mass rehousing and relocation of Tibetans by the Chinese government into socialist villages in the last seven years.
   1. Origin of policies:
      1. Great Development of the West (2000): including two environmental migration schemes, reverting farmland to forest (退耕还林) and reverting pasture to grassland (退牧还草)
      2. New Socialist Countryside and Comfortable Housing Campaign (安居工程)(2005-present): NSC: renovation and remodelling of villages and settlements to achieve 八到农家. CHC: to ensure 80% of farmers and herders would live in safe and suitable housing within five years.
      3. Leapfrog Development Strategy (2010): greater investment and broader plans to spur economic growth and further reorganize the Tibetan countryside. Stated objective is to raise per capita net income of farmers and herders to close to national level by 2020. Expansion of area to cover Tibetans outside of the TAR.
   2.  Problems:
      1. Coercion on relocation and rehousing programs, despite state claims that they are voluntary
      2. Inadequate consultation and lack of remedies
      3. Inadequate compensation and subsidies
      4. Problems in housing quality and suitability
      5. Increased financial burdens: house construction and renovation costs borne by individual households
      6. Other cultural and economic impacts: Loss of farmland crops and livestock; increased living costs; limited employment opportunities; difficulties in integration
   3. Achieving surveillance through dividing each neighborhood along a grid system, destroying traditional spatial patterns of livelihood.

3. Research paper in latest issue of JOCC: “Nuisance value: Uyghur activism in Germany and Beijing-Berlin relations”
   1. Uyghur communities began settling in Germany in 1950s and 1960s; and by 1990s Munich has become their centre of national and political activism in Europe.
   2. Beijing has brought pressure on Berlin to monitor them and even intimidate them, but Munich also reacted by deciding to take in Uyghurs released from Guantanamo. Nonetheless, it has not taken concrete action to do so. Six of the detainees were eventually flown to Palau in 2009.

Children’s welfare and protection

1. Recent spate of negative news concerning children and students
2. Negligence of two children in Nanjing: “南京两名儿童被发现饿死家中，其父在狱中服刑，母亲有吸毒史… 警察曾将侥幸逃脱的女童再一次交还给吸毒的母亲；曾热心帮助照顾孩子的邻居，终因担心“惹麻烦”而最终退还了李家的钥匙；女童所在社区曾以不符合政策为由拒绝将其送往孤儿院……一次次让孩子活下去的机会，就这样被错过”
3. Nandu editorial: Gaping holes in legislation and implementation:
   1. “《未成年人保护法》在法律责任部分，对有关部门该履职而不履职的行为，仅给出责令改正、行政处分的处罚，出现类似未成年人被饿死等恶性事件时，并未有更严重的追究”
   2. “现行《收养法》虽然将“生父母有特殊困难无力抚养的子女”列入可以被收养的未成年人范围，但通常的做法中，却总以“孤儿”和“查找不到生父母的弃婴和儿童”作为社会福利机构收养救助的对象，本案中所在地街道便以李氏姐妹生父母健在为由，拒绝将其送往孤儿院”
   3. “《收养法》也对社会收养人有诸多条件限制，包括了如“无子女”等要求，便将有亲生子女但仍想收养的群体拒之门外”
4. Government reaction: Introduction of pilot program “适度普惠型儿童福利制度” at four locations in Jiangsu, Zhejiang, Henan and Shenzhen.
   1. Children will be categorized into four groups: “孤儿、困境儿童、困境家庭儿童、普通儿童”. Under each group there are further subdivisions. Welfare coverage will be provided according to different subdivision and different location.
5. New Weekly June 15 issue: “少女之殇： 中国少女生态报告”
   1. “我们的成人社会，没能保护好少女。没有在人身安全上保护好少女。名为“公仆”的官员和名为“为人师表”的公职人员，频频成为伸向少女的黑手。他们丧失了礼义廉耻，猥亵性侵未成年人，仿佛他们从未有女儿或亲人。没有在法律程序上保障好少女。刑法里有强奸罪和嫖宿幼女罪，但后者激起了公众的愤怒，因为“嫖宿”之称、量刑标准和实际效能。它并未成为扼制犯罪者的利剑，反而成了某些恶人逃避法律重责的保护伞。没有在价值观念上引导好少女… 没有在社会体系上援助好少女。”

New law on elderly care

1. Law for the Protection of the Rights and Interests of the Elderly requiring children to provide financial support, mental support and life care to elderly parents once they reach age of 60. Employers are to provide 20 days of paid home leave to employees whose parents live far away.
2. Critics: “An unenforceable law seems like mixing law and ethics”
   1. Ambiguous definition: E.g. what constitutes regular visits?
   2. Universal application unviable: E.g. unrealistic to demand migrant workers who may not afford to travel home often
   3. No specified punishment for those who break it, though law states that those who neglect the elderly could face court action
3. First ruling based on new law: A case in Wuxi, Jiangsu: “77岁老太储某到江苏省无锡市北塘区人民法院起诉要求其女儿女婿履行物质和精神两方面的赡养义务。7月1日，法院公开开庭审理此案，全国20余家新闻媒体记者旁听了庭审，法院判决支持原告要求女儿“常回家看看”的诉讼请求。”
   1. 无锡市北塘区人民法院院长: “通过解读我国相关的法律，我们认为，精神赡养包括三个方面，即人格尊重、成就安心和情感慰藉，换言之，精神赡养必须同时满足老年人的自尊需求、期待需求和亲情需求。因此，精神赡养并不只是简单的“常回家看看”，不但包括对老人进行积极的亲情慰藉（即情感的精神赡 养），还应当包括不对老人制造精神痛苦或精神虐待。如在言语、行为上不伤害老人、不限制老人生活自由和人身自由。老人再婚、找伴侣、交朋友，参加文艺体育 活动，以及对其他精神生活的追求，都不能进行限制。”

Society updates

2. Further measure against violent land expropriation: 国土资源部办公厅下发《关于严格管理防止违法违规征地的紧急通知》. More than 20 officials received punishment for breaking the law in land expropriation cases.
3. Latest figures on graduate unemployment: Economic Observer article “90后”的就业现实
   1. “今年夏季，竞争尤其激烈，有699万高校毕业生告别校园走向社会，创纪录的数字成就了“史上最困难就业季”… 虽然毕业生较2012年增加了19万人，但企业的招聘意愿却未见增长。”
   2. “《2013年中国大学生就业报告》称，2013届高校毕业生总体签约进程与上届相比明显下滑”
   3. “公务员招考规模确实在扩大，从2011年度的9763个职位、2012年度的10486个，增加到今年12927个。同时增加的是参考人数，2011年度突破90万人，随后数字仍逐年攀升，至2013年度，有7万人参加公务员考试。”
4. Most recent case of labor activism: Executive of US based medical supplies firm held captive by employees, following the January case of Chinese and Japanese managers being held hostage at another company. Cause of conflict: firm’s plan to move production to India.
   1. 商报 : “中国劳工历来好说话，但一段时间以来，厂主和工人之间的问题越来越多。因为，后者已经有了迄今所缺乏的自我意识，越来越以主动姿态解决问题。执政的共产党不让建立官方工会之外的独立劳工组织，许多冲突由此逐渐产生于企业层面。”
5. Launching of online petitioning system by State Bureau for Letters and Calls. The system runs only on Internet Explorer and requires verified information registration: need to submit national identification number. Critics:
   1. Identification may make petitioners vulnerable to retribution
   2. Give excuse to local officials to keep petitioners from going to Beijing: People’s Daily: “具体到开通网络投诉，这固然是促进信访工作密切联系群众的有益探索，但不能就此止步。网络渠道畅通，会对群众上访形成分流，这在一些地方会不会异化为截访的“正当理由”？网络投诉省转市、市转县，假如一层转一层，仍旧转回到基层，如何实现“事事有着落、件件有回音”？”

PUBLICATION HIGHLIGHTS

1. South Reviews (Nanfeng Chuang) on the younger generation: 青春解密中国
2. New Weekly on the rise of entertainment in an increasingly anxious society: 假装在娱乐
   1. On the entertainmenization (娱乐化) of anti-corruption efforts, serious literature, religion, traditional art, politics, government’s weibo, news, scholarship, etc.
   2. “在这个娱乐化的社会，法师成为典礼嘉宾，教授成为艳照门主角，公共知识分子成为微电影导演，女性成为了被围观的绿茶婊。娱乐是一条曲线，它将大众带到了需要关注的现场；娱乐也是一条虚线，它有时让社会错过了解决问题的机会。”
   3. “我们“参与”过的，郭美美事件、京城二少枪战、方韩之争、官员艳照，最后都被八卦化。“水越来越浑”的时候，也是大众眼花缭乱，反而看不清事实的时候。当网民热衷于谩骂郭美美而不是探究红会架构、只顾调侃艳照而不反思反腐机制，娱乐化所带来的关注，就失去了最有价值的作用。”
3. Journal of Current Chinese Affairs features collection of articles on stability preservation, among these:
   1. Susan Trevaskes on “rationalizing stability preservation through Mao’s not so invisible hand”: examines how authorities rationalize the policing of crime and protest and articulate current situation in terms of handling “social contradictions” and “struggles”, framing “social conditions” according to Maoist dialectics of suppression and leniency
   2. Xie Yue presents systematic data on how grass-root governments have found it increasingly hard to finance security operations.
   3. David Kelly on how the rise to dominance of stability preservation in the political order coincided with highly charged debate over “universal values”, as well as the related discussion of “China model”

TAIWAN – POLITICS

Controversial pact on cross-strait investments

1. Pact backed by the KMT sparked off intense clash at the legislature’s meeting: Cross-strait service trade agreement that “aims to liberalize cross-strait investments in a range of service sectors that includes real-estate, banking, e-commerce, beauty parlors, transportation, tourism, cleaning services and telecommunications” 兩岸服務貿易協議
2. Critics: Influx of mainlanders a security threat:
   1. 前國安會秘書長丁渝洲 : “面對未來大量大陸人士來台可能造成的國安問題，政府本來應教育民眾要有憂患意識，才能由上而下、由點到線到面形成國家安全網絡”
   2. “這項協議在簽署前，無論在溝通或協調上都不足，「只是由少數人關起門來所做的決策」，類似的決策錯誤已一而再、再而三發生”
   3. Ministry of Economic Affairs: “Chinese companies must invest $200,000 before they can dispatch up to two Chinese managers to Taiwan”: cheap Chinese labor will not be flooding the job market
3. DPP: “食衣住行育樂、生老病死，全面被中國攻佔”
   1. Lack of consultation: “服務貿易協議涵蓋台灣的各行各業，從食衣住行育樂、生老病死，都被中國所攻佔，像醫院、印刷出版、洗衣店、汽車保修、停車場、旅館經營、中西藥批發、美容美髮、社會福利機構、殯葬業等，未來中資將全面進入台灣社區巷弄之中，深刻影響台灣人的日常生活，但是政府沒有事前告知民眾並徵詢產業界，許多業者到現在都還不知道市場將有翻天覆地的變化。”
   2. Fear that intensified competition will squeeze out local capital and local workers: “國內業者多為資本額低的中小企業主與自營作業者，他們面對大型的中資入侵，特別是連鎖店式的經營模式，將毫無公平競爭的機會。”
4. Case of beauty salons and hairdressers
   1. “我方允許陸資在台以獨資、合資及設立分公司等設立商業據點，提供美髮、美容服務… 中國資金龐大，來台將削價競爭搶客，台灣面臨很大的壓力，且經營階層由中籍人士擔任，台灣人只能當洗頭小妹，工作機會被剝奪，薪資被壓榨”
5. Case of publishing companies
   1. “出版產業鏈的「出版」、「印刷」、「書刊發行」、「書刊零售」四個行業，後三個都已經開放給陸資進來了… 台灣的出版業，早已守無可守。所以政府能做的事情，只能轉守為攻，必須把出版、印刷、書刊發行、書刊零售四個產業鏈綑綁在一起，團結力量大，才能找出一個和大陸坐上談判桌的基礎和立場… 我一聽到政府把印刷業單獨拿出來和大陸談相互開放的時候，就感到大事不妙。”
   2. “被切割開來的印刷業，形同打開一個縫隙，讓對岸四頭一身的出版集團得以變身擠進台灣，進而逐步對出版產業鏈條上下游產生擴張性的影響力，而「台灣小型、奈米型的業者，形同以卵敵石，難逃被消滅或併購的命運」”
6. Government response: setting aside of NT$95.2 billion to counter damage the pact may cause to local firms. Society: Almost 50% believes that Taiwan will not benefit from the agreement.

Related: China Brief article on Taiwan Work Leading Small Group under Xi Jinping

HONG KONG – POLITICS

July 1 demonstration

1. Record number of marchers according to more than one measurements
2. Occupy Central received boost:
   1. Forum held by Civil Human Rights Front;
   2. Donations;
   3. Survey indicating increased popularity of movement

Earlier: Creative protest at APA graduation ceremony a