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Wednesday, May 27, 2009

The Deng Yujiao Case,

Well, I usually don't comment on such cases of injustice, since there are so many. However, it emerges that there may be a political economy angle here. Apparently, the deceased (I won't say victim since he was a perpetrator) and his two associates worked for the county investment attraction bureau. This bureau is in every local government unit, and their job is to attract investment. The day of the confrontation, Deng Guida (the deceased) and his underlings were asked by the local iron mine boss to "take care" of a few farmers whose land was taken by the mine boss. They did so successfully and were invited by the mine boss for an evening of entertainment, which ended in "Fantasy City." The piece below, published by Boxun, claims that the mine boss gave Deng Guida another "task", that of "procuring" Deng Yujiao for the mine boss. This then led to the subsequent confrontation between Deng Guida and Deng Yujiao and the killing.

There is some intimation that this case may lead higher up and uncover of network of corrupt cadres in Hubei (Question, why are county level cadres doing the biddings of some mine boss?). This may place party secretary Luo Qingchuan in a difficult position since he was promoted upward from the local bureaucracy. Badong County was never in the jurisdiction of Yichang, where Luo cut his teeth. Yet, Badong is only a few kilometer up river (the Yangtze) from Yichang and Luo may be familiar with many officials in Badong. If this proves to be the case, he may have incentive to slow any investigations launched by Beijing to dig deeper on this issue. He may have preempted this by placing Deng Yujiao under house arrest instead of placing her in jail or a mental hospital. Perhaps he is hoping that her release will stop a Beijing investigation. However, I don't think the netizens of China will be satisfied with this.

Oh, also, the WSJ did a write up of this. Please see below:


省委知情人透露:罗清泉19日已知邓玉娇案幕后凶手,来头更大
(博讯北京时间2009年5月28日 首发)
作者最新留言显示,此文给博讯首发,内容可信。


【二】案情如下(整体如此,细节另论):

1、案发日下午,福成矿业与当地农民发生用地纠纷,矿上打电话给镇主管招商工作的郑建武,要求派员协助解决,郑随即指示邓贵大、黄德智、邓佳中三人出现场。邓三人不辱使命,把事平的很快很好。傍晚,周矿长率三人尾随邓贵大三人来到镇上,喊上郑建武,举办一个答谢性质的宴会。酒后八人去梦幻城继续“消费 ”(先吃后洗,这是现在场面人请人“潇洒”的必然一条龙服务)。

是酒前、酒中还是酒后,商定“嫖娼”细节的,现在不清楚。但有一个主题:就是周矿长看上邓玉娇了,或者是听说是“梦幻城”有邓玉娇这么一个人,今天,要去“买春”“买处”,邓贵大等三人须在周程见到邓玉娇之前,把邓玉娇“摆平”。

另一方面,我们知道邓玉娇在歌厅上班,这时(很可能还没到上班点)邓玉娇怎么会在洗浴房洗衣服呢?这很可能是唐芹、贺德江做内应,给邓玉娇下的一个套。(邓玉娇好朋友杨红艳不是说了吗,唐芹给她打电话,说给她妹妹今天过生日,请好朋友们来梦幻城洗脚,K歌嘛)。唐芹和另两个服务员在“水浴房”休息间,这时邓玉娇背着挎包来洗浴房洗衣服,这才有黄德智与邓玉娇在洗浴房“不期而至”的场面。

2、邓贵大八人到梦幻城后,周程等人进入包间等候,邓贵大三人去“摆平”邓玉娇。黄走在前面,进入洗浴房,把门插上,向邓玉娇提出“特殊服务”的要求。邓玉娇一正派女子,虽不得不谋生在此地方,但直接听此要求还是感到愤慨,但仍不失理智的、较强硬的拒绝了黄德智,黄德智遂拿出对一般小女子“买春”“买处 ”的手段,纠缠、猥亵、性侵害邓玉娇(就是抓摸乳部、下身等,不是指强奸;邓母与律师闹矛盾即在此),邓玉娇恼怒挣脱,躲避至休息间,黄德智不依不饶又跟进。跟在外边的邓贵大见如此,矿老板要求的“事”给安排不了,那还行?!对工作尽职尽责的邓贵大遂上来加入施压,并有炫耀、扇击邓玉娇那沓钱的过程(注意:一般嫖娼不用4000元的),威逼利诱邓玉娇都予以拒绝。这时,邓玉娇所谓好朋友唐芹上前解劝(很可能是站在邓贵大立场上)。邓玉娇一下明白过来,这一切都是别人给自己下的套,遂大怒,要走出房间。这时邓贵大恼羞成怒(心理活动应该是:这工作还怎么完成),拦住邓玉娇往沙发上推,邓玉娇掏出水果刀示警,欲走;邓贵大二人仍上前拦推邓玉娇,邓玉娇这时已急了眼,挥刀刺向二人,混乱中邓贵大扑通倒地,黄德智受伤,邓佳中在门口吓傻了。

一时间时间凝固了,这时邓玉娇的好朋友杨红艳赶到了,看见这一幕,遂拉住愣住的邓玉娇,“你还握着刀干什么?”这时邓玉娇才醒过神来,掏出电话报警。

3、野三关派出所接警后,赶到现场,一看这架势遂控制了现场,郑主任、周矿长等人知道出了这样的事也害怕了,遂向韩谭所长告饶,要求圆场。谭报案至县局,政委张友刚、副局长宋俊带人连夜过来,例行公事,做了讯问、笔录、勘验现场、组织救护转送伤员(或在这之前人就不在现场了)等。事这么大怎么办?请示领导(下面周矿长、郑主任也电话不断四处找人),最后领导指示:周矿长、郑主任等人马上消失,邓玉娇带到派出所留置;邓玉娇一见:我报的警,他们都没事了,反要带我走,什么道理?遂才有玻璃杯砸警察一说。

4、第二天,宋副局长等向县委、政府汇报的那个版本,基本上是原生态的,总的情况是清楚的(把饭店报销的饭单都取走了)。领导一听,这回丑丢大了!怎么办?他们素以“讲大局”“政治上成熟”在关键时刻励己,遂决定:首先把周矿长、邓主任摘出,小女子邓玉娇留置,剩下邓贵大等怎么善后,你们公安局拿出一个方案来再议。“控制局势,稳定大局,是其大政方针”。

【注:这时讲“人和事都不能逾越法律,要依法遵法,公民人权高于一切”,跟本不在他们的视野之内,邓玉娇这个活生生值得人们尊重的生命,在他们眼里只是一个"符号";至于胡总书记讲过:“要科学发展观,绿色GDP,要以人为本,和谐社会”对此时巴东县正合适嘛?福成矿业与民纠纷(有没有污染和破坏资源、损害农民利益等问题),黄雄的“梦幻城”娱乐业的负面效果,对生意人就这么惯着,好吗?这么对待一奇女子,对待一群为非做歹之人合适吗?真要善恶不分、黑白颠倒,激起民怨民愤来怎么办?哎!壮士断腕,不要这样的GDP也罢,以人为本,建和谐社会从今以后“科学发展”;这才是真正有“大局观 ”“政治上成熟”。你巴东县变害为利,因势利导,真正按胡总书记的指示,这么干下来,说不定正是时代典型呢。可惜,这种正反馈的思维模式,在这些干部身上,绝对是负反馈反映的】

调子这么一定,更周程、黄雄等人平日里纠缠不清的人,一听,精神一振,对,就这么办,我们马上具体执行。

【三】后面的话:

不知是提炼原生态的东西,必定会露出本色的东西,还是公安队伍中总还是有些天地良心的人,或者还是深文周纳考虑的不周全,总之“邓玉娇不是卖淫女,邓贵大等三人是在索要特殊服务被拒,还有‘一沓钱打脸’‘推到’等情节后,被邓玉娇刺伤致死的。事发后,是邓玉娇主动打电话给警方报告的,邓玉娇受到了‘精神病人 ’的待遇”。这些基本情节和根本事实,就这样“公示”给了社会大众。

人民就有判断善恶是非的天然的良知良能,他们就从巴东官方的“通告”中,就能读出真实来。越描越黑,越掩盖越暴露,越回避越实质........;全中国人民现在都清楚地知道是怎么回事了,就你们巴东公安和有关上级"还在侦查"。

够了,快止步后头吧,不然,你们和你们的上级都将被拖入深渊,一往不复。

邓玉娇暴露的问题是敏感、深刻的,《潜伏》中吴站长有句话:神奇的一跳,正跳在我的神经上,有点牙疼。邓玉娇的一刀,击中了邓贵大的要害(其实一个小小的邓贵大以致周程,何足挂齿),也击破了天。

1、基层公务人员(基层一级政权)沦为商财人等的工具,逼良为娼、犯强迫民女卖淫罪(期间涉及到流氓侮辱、性侵害妇女罪,以及涉嫌强奸妇女罪)。

(注:杨立勇局长讲“邓贵大不会强奸邓玉娇”,其实在“技术上”他并未扯谎,黄德志、邓贵大虽然拿出流氓手段,如若邓玉娇屈从了,邓贵大们是不敢吃“第一口”的,他们会将叼来的羔羊送到另一个大狮子面前)。

2、地方一些公务人员,与财商、黑恶等沆瀣一气,受害的只能是平民百姓(如此地方,色情场所必是泛滥,而黄雄类后面没有警方背景那是不可能的,周程矿长可以“ 买春”“买处”,邓贵大等也可以陪同嫖娼,被鱼肉的只能是受经济危机影响回乡,被迫在梦幻城处打工谋生的邓玉娇们)

3、片面以经济建设为唯一导向,经意发展是硬道理,不管黑猫白猫抓住耗子就是好猫,这是被歪嘴和尚念经的典型代表,其实巴东县发生的问题也正是对科学发展观,要以人为本,建和谐社会,倡导八荣八耻的发动。

4、民女邓玉娇被逼无奈,奋起反抗逼良为娼,英勇的与“强迫妇女卖淫罪”做斗争,如果不说是崇高的,至少在法律上是无罪的,如有不当后果,也只能有巴东地方当局承担。好女反成“精神病”,不是对人民基本价值观念的讽刺吗?不是对基本人权的侵害吗?

罗清泉书记5月19日看到了邓玉娇材料。

作者署名:字匠101

  2009年5月27日

  最后附一句:今早打开电脑,知湖北警方已把邓玉娇转为监视居住,很好!又往正确方向走了一步。

[博讯首发,转载、引用请注明出处。图片文字部分,请直接转图片]

博讯记者找到24日人民网的一个帖子,基本佐证了这个真相:
投资人为什么要请招商办的人

关于邓玉娇案福成矿业的老板为什么要宴请劝贵大等镇干部?

此案的报道五花八门,但是有的网友想的比较细致,对相关的事情开始分析深层的东西,本人也一直在高度地关注,就本题目做一些分析,也许对网友们有所帮助。

据相关报道说当晚和劝贵大等人一起吃饭的是福成铁矿的周矿长,而且是周买的单。

1,那么如何能在一个地方投资铁矿呢?如果你有钱,有两个办法,一是你公司报名参加正规的招标,拍卖,挂牌,依据你自己的经济实力和矿的价值去竞买取得探矿权或采矿权证;二是你在当地以招商引资的名义进入,拿上你的投资计划书,(最好能证明你的经济实力)和县级以上政府的主要领导和相关部门接触,一经谈好,这些权证政府会出面给你协调的,同样也是走程序把权证办到你公司的名义,而且不用花大力气去竞买,得到的价格可能是起始价或略高于起始价,给国土部门的解释是此矿为招商引资相目,此项目如果给了此公司每年能有多少多少利税,还有什么就业岗位等诸多好处,当然国土部门照样公告:有资质的公司都可参加等,但事实上当地政府给你设一任何条件,别的公司根本就连报名的资格都没有,比如说报名时到当地县级政府的那个部门开一个什么证,或要县政府的什么部门审核才能报名,你想你能通过吗,做梦去吧,只有认可的投资人才有权啊,明白了吧!

2,公司拿到探矿权证后,公司要投资开矿,取矿石,建铁粉选厂,要赚钱,对不起按规定不能以探代采,你要花钱让地质部门给你做勘查报告,到最终详查报告出来你要等将近一年,还有地灾报告,水土保持,安全报告等一系列报告做出并专家评审通过后才能审领采矿证,这样一折腾起码要两年的时间,最后还要办安全生产许可证,投资人能等吗,只好想办法。

3, 找县领导通融或黙认后能开工后,接下来你要做的工作多啦,求的部们和人更多,有人说受那么多气,那钱不赚不行啊,不,你不能和钱记仇吧,都知道你做的是暴利的行业,你总要意思一下吧,要按法规来你就等两年以后吧,到那时还不一定全能批下来。

4, 通常走访的是,地市级和县级国土部门的相关科室,地质科,矿管科,土地科(你要办占地临时土地证),林业局,生态保持等,还有本来和他管的部门没关系也想办法让你的项目和他的职责发生关系,哈哈,明白吗?

5,最后你毕竞要在所在的镇村做事吧,开矿,建厂,那就涉及到和村镇,农民打交道啦,这时的村镇干部才能大有作为,占地的事你要和农民打交道,用地下水,用几百千瓦的电,建尾矿坝,尾矿对土地和地下水的污染,破坏生态,空气浮尘的扩散,矿车损坏路面,等那一条都能让你停产,这样的工作全凭镇干部和村干部给你协调,一般干部你要给点辛苦费吧,要不谁给你去得罪人去,虽然都明白你和县领导大人物处的和亲兄弟似的,但是有个卖力与否的问题吧,这种项目其实镇上所有部门及干部和村里的任何干部你都要维护的很好,要不你就做不成或高成本,任何一条理由就足以让你停产,你出血不?甚至你要拿出一部分暗股去送人才能摆平,你不和邓大贵搞好关系行不?更有比较卑鄙的人一方故意鼓动农民闹事,另一方帮矿主做工作,抬高自己的价值。

6,按照网上的公布福成矿业投资一个多亿估计是县主要领导主抓的项目。给你们一个专业的数字,一吨铁粉的生产成本在巴东最多350元,07年行情在1200元以上,现在还有700元左右,按福成的投资至少在日产500吨以上,能赚多少钱你们自己算,有关部门当然更明白。所以看你投资人如何去和谐吧!(Modified on 2009/5/28) (博讯 boxun.com)

WALL STREET JOURNAL
MAY 28, 2009
China Murder Case Sparks Women's Rights Uproar

By LORETTA CHAO

BEIJING -- A hotel employee whose arrest for murder sparked a wave of national sympathy in China after her lawyers said she was fighting off a rape attack has been released on bail, the official Xinhua news agency said.

Deng Yujiao, 21, was arrested May 10 after she allegedly stabbed two local government officials with a fruit knife in the Xiongfeng Hotel in central Hubei province, killing one of them.

Ms. Deng got in a quarrel with Huang Dezhi when he "mistook" her for a bathhouse attendant and asked her for "cross gender" services, according to a police report.


Deng Yujiao at a hospital in Badong, in central China, on May 18.


Mr. Huang's colleague, Deng Guida, eventually intervened and the argument escalated when he pushed Ms. Deng onto a couch twice, and she "took a fruit knife and stabbed" Mr. Deng four times, including once in the neck, the report said. She also stabbed Mr. Huang in the forearm. Mr. Deng, who worked for an office overseeing investment projects in Badong city and isn't related to Ms. Deng, later died from his injuries.

Badong County officials said the local public-security bureau is investigating the case, and Ms. Deng hasn't been formally charged. A public-security report said she was initially detained for "suspicion of intentionally killing" Mr. Deng.

Ms. Deng's lawyers have said she was acting in self-defense when the men tried to rape her after she refused to have sex with them for money.

The case sparked public anguish over the issue of violence against women, and a flood of sympathy for Ms. Deng in comments flooding in to Chinese Internet forums and blogs.

An essay posted on a Web forum hosted by the People's Daily newspaper called the stabbing a "heroic act" and a milestone for women's liberation. The date of the attack -- May 10 -- "will forever be remembered as the day on which a [girl] bravely defended herself and fought against the corrupt official when her life was threatened," said the author, writing under the name "Shenzhou Shouwang," or "Watching Over China."

In an forum on the same Web site, a user called Guo Chunfu wrote that Ms. Deng "used her own acts to show that even the underprivileged can have a dignified life."

The outpouring of support prompted the Badong County government to take the extraordinary step of posting a headline on its Web site inviting anyone concerned with the case to call the county's news and information center. The site says a representative has been assigned to the case in order to ensure that investigations are transparent and timely.

Last weekend, five women demonstrated in support of Ms. Deng near the Beijing West Railway Station. Wu Rongrong, an AIDS activist in the group, said the protest highlighted the need for greater "social respect and legal protection" for women. Another protester, wrapped in white cloth and wearing a face mask, lay on the floor next to sheets of paper that read: "Anyone may become Deng Yujiao."

Spokesmen for the Badong County government declined to comment further on the case, and Ms. Deng couldn't be reached for comment.

Her defense lawyers were fired at her mother's request this week after disagreements over strategy.

Comments:
人渣当道。黑暗中何时破晓?
 
Oh come on. He may be a "perpetrator" in your opinion, but does that mean that stabbing him to death was an appropriate, rational or legally justifiable response?
 
Dear billy,
If some woman in your family were facing rapist and his complicities, at that crucial moment, would you still suggest by saying "dont consider self-defence first, please be rational, must do appropriate"? In that case, what is the "justifiable response" for your woman's behavior in your eyes?
 
I have two virgin daughters 17 and 18. If they had done as Deng Yujiao in a similar situation I would applaud them no matter the consequences. Those two officials are clearly corrupt; arrogant; and abusive. They think that they can pick on anyone's daughter and abuse them. Deng Guida got what was due to him - unfortunately his colleague did not. As a Father and a human being I am truly disgusted by this case.
 
Dear anonymous(es?),
underpinning of the very idea of a "nation of laws" is the belief that applying a level, consistent standard of judgement, based on commonly accepted and understood values, would be applied to all cases. You see, the smarter bears recognised that there is no value, or justice, in making snap judgements based upon one person's (in this case, you) emotions, fears and daughters.
 
Dear Billy,
Stop being a pompus ass, the question being ask is if your daughter weghing less than 90lbs were being manhandle by two men and according to statements taken; had forceably had her underware removed would she be entitle to defend herself with a knife.Or would you urge your daughter to act rational remember the rule of law get rape and then report the matter to the police. Your a dickhead with no commonsense.
 
Billy,

Actually it is perfectly acceptable to defend oneself against violent crime even in countries ruled by law (rather than ruled by men, like China). Prosecution of criminals only comes AFTER crimes are committed. NO ONE is required to sit there, accept the crime being perpetrated, and only THEN go report it to the police. What kind of screwed up society do you want to live in?
 
Dear Anonymous,

I find your valuing your daughters' virginity to be a rather disturbing thing. Would you think less of them if they weren't virgins? Do non-virgin girls deserve to be raped? Why does your daughters' virginity figure into your message at all? Why not just stop at "I have two daughters"???
 
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Sunday, May 24, 2009


Still Geniuses Out There

Okay, this princeling worshiping has really gone quite far. Now, we have the media doing stories which pay tributes to the grand children of revolutionary veterans! I am sure their accomplishments have nothing to do with their grandparents and parents' status. Chinadigitaltimes has some nice photos of grandson Bo Guagua to go with the piece. As you can see, he leads a charmed life in the UK....

Oxford star Bo scoops top award in Britain
(China Daily)
Updated: 2009-05-11 07:32
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The son of a high-ranking Chinese official studying in Britain won a special prize at the weekend aimed at celebrating the country's ten most outstanding Chinese youngsters, the China News Service reported Sunday.

Oxford star Bo scoops top award in Britain

Bo Guagua, a philosophy, politics and economics (PPE) scholar at the prestigious Oxford University, was among 10 people given the Big Ben Award on Saturday for his contributions to the community, the report said.

The 22-year-old is the son of Bo Xilai, the former Chinese minister of commerce and current Party secretary of Chongqing municipality. He was chosen from 28 candidates nominated this year for the prize, which is awarded by the British Chinese Youth Federation, the report said.

The other winning candidates include snooker player Fu Jiajun, director and writer He Xueyi and violinist Chen Mei. Bo was the first person from Chinese mainland to be enrolled in the Harrow School before being accepted at Balliol College, Oxford.

He has already written his first book, entitled Uncommonwealth, a sharp criticism on the blind pursuit of fads.

He has also been involved with the Oxford Subsidizing Poor Overseas Student Association, the Beijing Olympics Overseas Student Volunteer Organization and the Adam Smith Institute. He also set up the Oxford University Sichuan Earthquake Fundraising Committee, raising 15,000 pounds ($22,500) for victims of the May 12 disaster last year.

Comments:
That is because he comes from a family of power. Atleast in China, power means privileged opportunities, money, and, of course, arrogance.
 
A conservative estimate of the costs of young Mr. Bo's school fees and moderate lifestyle might come in at around 50K sterling. Assuming that Mr. Bo Sr earns 20K RMB per month, that means that one year or Jr's life abroad costs three years of working life for Sr, plus what we might assume to be another three years for support for his wife and others. In other words, Mr. Bo, who has no living expenses of his own, is spending a multiple of 6 times his annual salary on the family. Maybe.....much more.
 
Well, okay, to be fair though, Bo's wife is a lawyer, who can make a lot of money. Of course, why is she the hot lawyer in town, that's another matter......
 
Actually, his son was expelled from Oxford.
 
Actually, his son was expelled from Oxford.
 
there has been rumor about his being expelled from oxford, as can be found on wiki today...
 
What's the reason for his expulsion?
 
im from oxford too. he wasnt expelled from university but he chose to take the year off to do some philosophy thesis and is graduating next year. ive met him a couple of times and he's far more modest than what ive read about him.
 
Wow, this photo is on People's Daily's homepage (at least today). And here is a people's daily blog on the photo: http://blog.people.com.cn/blog/c1/s329,w1245462863356301

According to the blog, the photo was taken at a masquerade ball, not a bar.
 
Here is an interview with Bo Guagua. http://news.ifeng.com/photo/person/200906/0615_5135_1203795.shtml

Doesn't look as bas as some people say.
 
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Sunday, May 17, 2009

Chinese Banks Are Not Good Students

Peter Goodman, whose columns are always concise and well informed, wrote yet another stinging critique of American banks entitled “Lessons the Teacher Forgot.” The basic argument of the piece is that US banks increasingly behaved like Chinese banks, which were supposed to learn market discipline from their teachers. His observations of Chinese banks were also quite on-point:

In effect, American banks operated not unlike the Chinese banks they were supposed to modernize. They extracted profits by following a variation of the principle long pursued by their Chinese counterparts: lend without hesitation while extracting your cut, confident that the government is on the hook for the losses.

In China, ventures may be spectacularly unprofitable, yet enrich everyone lucky enough to get a piece. Developers, for example, construct vacant office buildings as an excuse to borrow from state banks. They rake off a cut for themselves, pay bribes to the party officials who deliver the land and reward bank functionaries with sumptuous banquets and trips to Macao. Soon enough, the trophy skyscraper descends into financial disaster, but the developers, bankers and party officials have already extracted their riches, and for long afterward they will still enjoy them.


As an illustration, there was an interesting exchange between Baogang executive and CBRC official at the Lujiazui Conference recently. Basically, Xu Lejiang argued that the government is doing too much to keeping steel firms alive (Baogang was forced to buy up many firms, for example) and that some steel firms should be allowed to go bankrupt. Banks then should be prepared to “foot the bill.” There is a wonderful sense of irony here because Baogang has benefited from billions upon billions in preferential loans from banks. Anyway, a CBRC official in audience responded by saying that “as a banking regulator, I most fear the phrase ‘banks footing the bill’.”

As Goodman points out, the reality is that thousands of Chinese firms are being kept alive by the banks and government policies now. The difference between the US and China is that the US government could not have ordered the Feds to intervene to save these financial institutions before the crisis, whereas the main job of the PBOC and CBRC is to prevent a major financial crisis. Of course, they do some monitoring, but when financial institutions become insolvent, they have shown perfect willingness to print money to bail them out to preempt a system-wide crisis. So, this signals to all financial firms and state-related conglomerates that the center is there to bail them out, setting off a frenzy of borrowing and bond issuance. Over time, massive debt is issued on the basis of empty office buildings, under-utilized infrastructure, stock market speculations….etc. I am not sure how this all will end…..

Comments:
Quote: "...enrich everyone lucky enough to get a piece. Developers, for example, construct vacant office buildings as an excuse to borrow from state banks."

But how do the developers profit from this? Don't they need to find somebody who's willing to invest his money to buy the buildings, i.e. someone who doesn't recognize that he's getting a bad deal?
 
Dear Professor Shih,

I just wonder how you could think of the new published book regarding Zhao Ziyang's age in China's 1980s. I feel the title of its Chinese version “改革历程” is more appropriate than its English version's title, even though the "prisoner" word can attract more readers.

As a researcher in political science, will the truth told by Zhao make some impact in your previous research outcome? How will the facts contribute to your future work on China's politcs and economy?
Thank you.

Kind regards,
Michelle
 
Victor,

In 1997, at a time of several runs on small branches in rural areas, I informally surveyed businessmen I'd met in Shanghai about whether they had any concern. They had none, because, as they said, 中央绝对不会让它倒。 What if, I followed, central government was unable to staunch the bleeding? No businessman was even willing to consider this as a possibility. (嘻嘻哈哈地)不可能,讲什么话呀!

Nothing has changed since then, especially given the purported stimulus program.

Rich Kuslan
Asiabizblog
www.asiabizblog.com
 
I find it difficult to believe talking to a few Shanghai businessman you somehow know what everyone thinks...
 
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Sunday, May 10, 2009

What's behind negative PPI? What about factions?

I got a couple of nice emails from readers later, and I thought I would share my replies with everyone.

First, a couple of people said that the hugely negative PPI is accounted for by declining commodities prices and a lot of "wait and see" attitude among urban consumers. Here is my reply:

I think rich urban consumers are taking a wait and see attitude. You are neglecting the estimated 40 or so million who are unemployed at this point due to the export slump. Also, if commodities deflation accounted for most of it, why don't we see the same deflation in advanced countries. US PPI deflation was 1.2% in March (Jan, Feb was positive), while CPI was -.1% in March and positive for Jan and Feb. Consumers and firms in the US consume a heck of a lot of oil also, so how do you account for it? To be sure, China is factory of the world and is more vulnerable to price shocks of commodities, but we do not see any similar deflation among other net exporters in Asia, like Japan, S. Korea, or Taiwan. Another explanation is that wages are less rigid in China, and we are seeing wages plummeting in China. I think this probably explains some of the negative PPI, but it certainly does not help the consumption picture if true. Finally, there is massive over capacity in some sectors, like steel, which is driving down prices. This is partly caused by the stimulus program.

Another reader also wrote in to ask a question about my book (now as low as 23 bucks!). Basically, he asks whether my theory of factional politics can account for current events, as it seems the generalist factions have taken over economic policies during a crisis. My reply:

Wen is generally seen as a weak technocrat, but he has used this crisis as a way to strengthen central power. He abolished road tolls, centralized fuel tax, and started on a national health bureaucracy. The problem now though is not that the generalists are in charge, but that no generalist faction is powerful enough to delegate policies to Wen in the face of a crisis, which exacerbates the problem of Wen's perceived weakness. Back in the 80s, Deng, though reluctant to centralize, would delegate economic power to the technocrats when he had to. Now however, at least two elite factions (Hu Jintao, Xi Jinping, and possibly Zhou Yongkang) are jockeying for power, so no one can say that "Ok Wen, you are in charge here 100%". Instead, Wen is only getting Hu's support and facing opposition and delays from followers of other generalist factions.

In the conclusion of my book, I argue that the conflicts between generalists and technocrats are ultimately policy disagreements. The real fight is actually between generalists factions jockeying for power. In all politics (not just authoritarian politics), the worse thing for decisive decision is continuous struggle without resolution.

Comments:
I am curious about whether the technocrats in financial sector felt shameful with themselves, given the ridiculous result of their banking reform. No matter generialists or technocrats, it is impossible that they are struggling for taking the supposed responsibilities of the past failures and the future real reforms. I wonder if they are actually struggling to dig some way of escaping, at least financially, if they strongly sense the end of something there.
 
Dear Victor,

How does the stimulus package produce overcapacity in the steel sector? One would imagine that, because of all the construction projects started with the stimulus package, the market would be demanding more steel now.

I suppose the reason is that the steel producers also received their part of the "package" and are using it to increase production?

PS. I am one of the 小气s who was waiting for the paper cover of "factions". I have waited for months and I finally got it now, can't wait to read it/.
 
Quote: "if commodities deflation accounted for most of it, why don't we see the same deflation in advanced countries."

Based on official GDP (market-price, not PPP), China consumes three times as much oil per $ of GDP than Germany does, and 1.5 times as much as the US.

I have no data on iron ore, but considering the amount of iron produced in China, I would assume that iron ore prices also have a much bigger effect in China than in the US or Europe.

But I'm sure that commodity prices are not the only answer. For instance, corporate profits seem to have plummeted in many sectors, and this could be a sign of more intensive competition forcing down prices (if you go from "It's hard to keep up with all this steel demand" to "Will anybody buy our steel? Pleeeaaaaase!", margins are bound to suffer big time).
 
What should we make of the fact that Wen came out to announce Shanghai as the future international financial center? After he gave so much effort to Tianjin, as a stratagem in part. Is the Shanghaibang making a comeback, with Wen as its fall-guy?
 
In terms of mindset of policy makers, how do you think about them had/have been getting into buying variety of American "rubbish"? Did they get brainwashed and can't help, or just do it anyway in some special purpose?
 
Just read that April wholesale prices in Germany are a massive 8.1 % below the same month last year.

Based on that, I'd tend to reiterate that China's current deflationary environment isn't particularly unusual.
 
Hi victor.

If you recall, last November, you wrote a post about how the local gov'ts and SOE's were probably bankrupt and that the stimulus funds from the central gov't were designed to keep them afloat and that the rest of the stimulus money, which was supposed to come from local gov'ts, probably isn't going to materialize...

fast forward to today...the FT reports that "most of the stimulus projects have been unable to start on time while others have proceeded slowly because of a lack of funds, according to a survey of 335 stimulus-related in-vestment projects conducted by the National Audit Office.”

I don't think that's a coincidence!
 
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Thursday, May 07, 2009

Deflation, Lending Slow-down in China, Now What?


Dear All, new post for RGE Monitor


Victor Shih | May 7, 2009

The recently published PBOC Monetary Policy Report is filled with optimism. Growth is strong; investment is on the rise; even export is looking better....etc. Then, I noticed something strange about the report. Throughout the original Chinese version of the report, CPI is referred to as "CPI," and the figure for 1Q wasn't so bad at -0.6%. However, the figure for PPI was only mentioned in Chinese "生产价格" and only in a brief discussion under a large green box on page 36. The PPI figures for 1Q was horrendous! The price of industrial goods fell by 3.3%, 4.5%, and 6% in January, February, and March respectively. So deflationary pressure is getting worse, not better. In terms of commodities and energy prices, the trend for January through March was -5.3%, -7.1%, and -8.9%, again showing a negative trend. To give the PBOC credit, someone actually put the PPI figures for a number of products on their English website: http://www.pbc.gov.cn/english/detail.asp?col=6400&id=1346

I strongly suggest readers take a close look at it. There is still some incomplete reporting though. For example, capital goods on the PBOC website shows a price increase of 0.1%, but the price of industrial goods decreased in March. What's the relationship between the two? Instead of getting industrial output figures, we find some data on individual categories of industrial outputs, like cars, buses, and TVs at the end of the table. We find that the MoM price of washing machines stayed the same while the price of TVs fell in March...etc. What about other industrial goods used by firms, like heavy machineries?? In a way, this is very disappointing. I think China has made great strides in statistical reporting, but when things get bad, they return back to their old game: obfuscation. Of course, all governments are tempted to do so when things get bad!

The other interesting figure that will creep up on us is April lending. The major state banks, which typically account for half of lending, already report that total new loans made in April was only 220 billion RMB, implying that total new lending was in the 400-500 billion RMB range. As a reminder to readers, March new lending was 1.89 trillion RMB, so we see a very drastic slow-down in April lending. Now we will really put to test the notion that the stimulus has generated sustainable growth. If May and June lending continues to be in the modest range (say below 500 billion RMB--already pretty high), we will see whether growth continues to be strong, investment continues apace, and whether housing and stock markets continue to rally. We'll see.

Comments:
Quote: "The PPI figures for 1Q was horrendous!"

These are year-on-year figures, though. And the world-market prices of major commodities (crude oil, iron ore) are down sharply y-o-y, something that has nothing to do with China's domestic economy.

Presumably, those industrial goods that draw heavily on imported commodities (e.g. steel) also see a trend towards lower prices because input prices have plummeted.

(Not really disagreeing with you, just trying to put it into perspective.)
 
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