Quotulatiousness

September 20, 2011

China’s local and regional governments may be sitting on massive hidden debts

Filed under: China, Economics, Government, Law — Tags: , , — Nicholas @ 12:13

As with the US or Canadian government’s debt, not all debt is held at the federal level. It may take some digging to discover what the actual debt levels might be, but it’s possible. In China, however, as local governments are forbidden to issue bonds or to borrow from banks, they’ve had to become extremely creative in finding ways to borrow money for their pet projects. Not just creative — at least in some cases — legally dubious:

About 85% of Liaoning province’s 184 financing companies defaulted on debt service payments in 2010 according to a report from the province’s Audit Office. The report also noted that 120 of these borrowers, de facto government agencies, operated at a loss last year.

Since 1994, provinces and lower-tier governments have not been permitted to issue bonds or borrow from banks. Despite the strict prohibition, their debt has skyrocketed as local officials incurred obligations through LGFVs, local government finance vehicles. The central government’s National Audit Office said these companies, at the end of last year, had taken on 10.7 trillion yuan of debt. No one, however, knows the true amount of LGFV indebtedness, and some have calculated the real amount to be more than double the official figure.

Why the disagreement as to the amount of debt? Local governments have gone out of their way to hide borrowings, perhaps in part because of their doubtful legality. As famed economic journalist Hu Shuli points out, new local officials sometimes do not know the extent of obligations left by their predecessors. There have been a number of stratagems employed, from the issuance of illegal government guarantees to the transfer of funds in roundabout routes.

H/T to Jon, my former virtual landlord, for the link.

September 18, 2011

Chinese censors crack down on . . . talent shows?

Filed under: China, Liberty, Media — Tags: , — Nicholas @ 12:49

They’ve become too popular, and the text voting for winners sets too much of a democratic example, so China’s State Administration of Radio, Film and Television (SARFT) is ordering talent shows off the air:

The latest run of the hugely popular Super Girl contest finished on Friday. A spokesman for Hunan Satellite Television said it would not show any TV talent shows with mass participation next year because it had been accused of breaking time limits.

“Hunan Satellite Television obeys the state watchdog’s decision and will not hold similar talent shows next year,” said Li Hao.

“Instead, the channel will air programmes that promote moral ethics and public safety, and provide practical information for housework.”

[. . .]

SARFT decreed that talent shows could not be shown in prime time — between 7.30pm and 10.30pm — or screened for more than two hours a day. It also banned text voting — with some suggesting officials were concerned that the democratic method of choosing the winner was a bad influence.

September 12, 2011

Is the People’s Liberation Army a paper tiger?

Filed under: China, Economics, Military, Weapons — Tags: , , , — Nicholas @ 09:36

An interesting article at Strategy Page looks at the myth and reality of China’s army and navy:

You don’t see much in the media about the poor training of Chinese military personnel. You don’t hear much about the poor leadership and low readiness for combat. But all of this is common knowledge in China. There, the military is not walled off from everyone else. Cell phone cameras and the Internet make it easy to pass around evidence (often in the form of “hey, this one is hilarious”). The government tries to play up how modern and efficient the military is, but most Chinese know better, and don’t really care. China is winning victories on the economic front, and that what really counts to the average Chinese.

Meanwhile, U.S. military leaders and defense industries are looking for a sufficiently impressive foe to help scare more money out of Congress. The Chinese Navy (or, more correctly, the Chinese Peoples’ Liberation Army Navy) is now the favorite candidate, for navy and defense industry analysts, to become the new Big Bad. Just how dangerous are these Chinese sailors and their ships? It turns out that, on closer inspection, not very.

This is the sort of thing that what went on during the Cold War. Russian military prowess was hyped by the American military, and their defense suppliers, to justify further increases in defense spending. When the Cold War ended, it was revealed how the Russian military, and defense manufacturers, played the same game. It also revealed that Russian military capabilities were far less than the hype indicated.

The basic weapon for this sort of thing is FUD (Fear, Uncertainty and Doubt). Works every time, although it is difficult to pitch the Chinese navy as a crack force. Most of their ships are elderly, poorly designed and rarely used. Their nuclear subs are worse than the first generation of Russian nukes back in the 1960s. The most modern Chinese ships are Russian made, Cold War era models. Chinese ships don’t go to sea much, not just because it’s expensive, but because Chinese ships tend to get involved in nasty incidents. Like the submarine that killed its crew when the boat submerged (and the diesel engines did not shut down when the batteries kicked in, thus using up all the oxygen.) Breakdowns are more common, as well as a lot of accidents you don’t hear about (weapons and equipment malfunctions that kill and maim.) Nevertheless, the Chinese are working to change this. Ships are going to sea more each year, and troops are getting more training. But unless the corruption is curbed, this could all be wasted.

Of course, if China isn’t the big military threat to the rest of the world, how will the Pentagon get Congress to go along with its perpetual demands for more funding?

August 10, 2011

China’s second-hand aircraft carrier puts to sea for initial trials

Filed under: China, Military, Pacific — Tags: , — Nicholas @ 08:45

The Shi Lang, formerly the Varyag, is undergoing a set of sea trials:

China’s first aircraft carrier began sea trials on Wednesday, the state-run Xinhua news service reported, a highly symbolic step in what is certain to be a years-long effort to create a carrier presence in the Pacific waters off its coast.

The carrier, once known as the Varyag, left Dalian, its northeast China port for what analysts said would be a test of its rudder, propulsion system and other basics. Xinhua’s two-sentence report stated only that the carrier would make a short voyage before returning to Dalian for further tests.

The Chinese Defense Ministry said last month that the carrier would be used largely for scientific research and training. Foreign military analysts say it could be a decade or more before the Chinese can deploy and operate a true fleet of carriers, the most costly and complex weapons systems in any nation’s arsenal.

August 8, 2011

China discovers that “You can’t stop the signal” again

Filed under: China, Government, Media, Technology — Tags: , , , , , — Nicholas @ 12:32

Strategy Page looks at the way news was disseminated about the high speed rail crash despite the Chinese government’s attempts to quash the story:

Since July 27th, China got another reminder that it no longer can control the news. On July 27th, China’s high-speed “bullet train” had a fatal accident, leaving over 30 dead and many more injured. The cause was inadequate safety and communications systems. In this case, one train was halted by a flaw in the signalling system and another came up from behind and there was the collision that sent four train cars off the tracks, and a bridge. The government immediately tried to keep the accident out of the news. This effort failed because of the ingenuity of Chinese Internet users, despite the government ban on Twitter in China. The ban was meant to impede the rapid spread of news the government wanted to control. Given enough time, the state controlled media could get out a story the government could live with. But blog, RSS and other Internet tools have been tweaked to do the same thing Twitter does. This was especially true of “micro-blogs” that quickly distribute the same 140 character messages Twitter does. Not as well, but good enough, and the news the government wanted to control spread uncontrollably. This included pictures and video of the accident, which the government planned to keep out of the news.

July 28, 2011

Signalling failure blamed for high speed rail crash

Filed under: China, Media, Technology — Tags: , , , — Nicholas @ 08:32

This sounds a bit fishy, as this kind of error has been known in railway signal systems for over 100 years: signals that fail to show stop as a default whenever power is lost:

After it was struck by lightning, the signaling device at the Wenzhou South railway station malfunctioned and failed to turn from green to red, An Lusheng, chief of the Shanghai Railway Bureau, told the news agency. He also said workers on duty were inadequately trained and failed to notice the malfunction.

Xinhua’s report, the first official explanation of the cause of the crash, raised further questions about China’s high-speed rail system, one of the world’s largest and most costly public works projects. The accident occurred when one high-speed train rear-ended another that had stalled on the tracks near Wenzhou in Zhejiang Province. High-speed rail has an excellent safety record elsewhere, especially in Japan, which has never had a fatality.

Chinese have flooded microblogging sites with furious complaints about breakneck development without heed to safety. Many also expressed fears of a cover-up, especially after reports that one train car was buried at the site despite the ongoing investigation and only later excavated.

July 27, 2011

Okay, everyone relax: China says aircraft carrier to be used for “research and training”

Filed under: China, Military, Pacific — Tags: , — Nicholas @ 07:44

That’s the latest story from China, which has finally acknowledged that they are rebuilding the former Soviet aircraft carrier Shi Lang:

China has officially acknowledged that it is rebuilding an aircraft carrier it bought more than a decade ago, but says the refurbished ship will be used only for research and training.

A defence ministry spokesman, Geng Yansheng, told reporters on Wednesday that work was under way on refitting an old carrier, a reference to the Varyag, whose stripped-down hull was towed from Ukraine in 1998 and has been under reconstruction for the best part of a decade.

“Building an aircraft carrier is extremely complex and at present we are using a scrapped aircraft carrier platform to carry out refurbishment for the purposes of technological research, experiments and training,” Geng said.

July 26, 2011

Chinese government announces safety review after high speed rail crash

Filed under: Bureaucracy, China, Media, Technology — Tags: , , , , — Nicholas @ 09:01

In the wake of the deadly collision between two high speed trains, China announced a safety review of the high speed railway system:

Mr Sheng said railway officials would be deployed at frontline rail operations across the country to overhaul maintenance standards and checks on power connections to pre-empt outages.

All local railway bureaux were to draw lessons from the accident, a statement on the railways department website said.

Public fury and scepticism have been expressed in China’s blogosphere, both about the death toll of 39 people — suggesting it is too low — and the safety of China’s rail network.

State newspapers have also expressed concern. The Global Times ran a headline: Anger mounts at lack of answers.

“As the world is experiencing globalisation and integration, why can’t China provide the same safety to its people?” an editorial read.

July 25, 2011

More on that Chinese rail crash

Filed under: China, Government, Media, Technology — Tags: , , , — Nicholas @ 12:49

The official story has changed a few times since the accident, and at least some Chinese feel they are entitled to the truth about the accident:

Internet users attacked the government’s response to the disaster after authorities muzzled media coverage and urged reporters to focus on rescue efforts. “We have the right to know the truth!” wrote one microblogger called kangfu xiaodingdang. “That’s our basic right!”

Leaked propaganda directives ordered journalists not to investigate the causes and footage emerged of bulldozers shovelling dirt over carriages.

Wang, the railways spokesman, said no one could or would bury the story. He said a colleague told him the wreckage was needed to fill in a muddy ditch to make rescue efforts easier.

But Hong Kong University’s China Media Project said propaganda authorities have ordered media not to send reporters to the scene, not to report too frequently and not to link the story to high-speed rail development. “There must be no seeking after the causes [of the accident], rather, statements from authoritative departments must be followed,” said one directive. Another ordered: “No calling into doubt, no development [of further issues], no speculation, and no dissemination [of such things] on personal microblogs!”

Electronic weapons to destroy other electronics

Filed under: China, Military, Technology, Weapons — Tags: , — Nicholas @ 12:05

Strategy Page looks at some interesting developments in the electronic weapons area:

A U.S. government report (from the National Ground Intelligence Center) indicates that China has developed useful weapons for disabling the electronics on American aircraft and warships. This is done using high-powered microwave (HPM) devices to create something like the EMP (Electromagnetic Pulse) put out by nuclear weapons, which damaged or destroys microelectronics.

[. . .]

Then there’s the EMP bomb, a legendary weapon that is much talked about, but has never actually been seen. Throughout the 1990s, information came out of Russia that a weapon had been developed that could generate a short range EMP (electromagnetic pulse) similar to that created by nuclear explosions. All computers within the range of the EMP bomb would be ruined. This is a truly devastating capability. Microprocessors are found everywhere these days; in automobiles, appliances, industrial equipment, medical devices and many other devices. Military microprocessors are often shielded to protect them against EMP, but the shielding is not thoroughly tested and even some military equipment will probably be disabled by an EMP attack.

A decade ago, a British military research team announced that they had duplicated the rumored Russian device and produced an EMP bomb that can fit in a 155mm artillery shell, small rockets or bombs. Such a device was supposed to be inexpensive and could be used to destroy civilian electronics that might be useful to nearby enemy troops. What is particularly worrisome about this new development is that, in the hands of terrorists, it could do a new kind of damage. While not killing people directly, the destruction of all electronics within an urban area could cause casualties and much economic loss. But none of these EMP bombs has ever actually reached the stage where they were actually ready to use. There was always some kind of flaw discovered in testing. Naturally, China is thought to have developed an EMP bomb.

July 24, 2011

No, that’s not suspicious at all . . .

Filed under: China, Government, Technology — Tags: , , , , , — Nicholas @ 11:39

. . . when you use backhoes to bury the wreckage before determining the cause of the high speed rail crash:

The wreck on Saturday night killed 35 and injured 210 after a high-speed train lost power for more than 20 minutes and then was rear-ended by another train, according to the Xinhua news agency. Six cars derailed and two fell off a viaduct near the city of Wenzhou.

[. . .]

Photos on the popular Weibo microblogging service showed backhoes burying the wrecked train near the site. Critics said the wreckage needed to be carefully examined for causes of the malfunction, but the railway ministry said that the trains contain valuable national technology and could not be left in the open in case it fell into the wrong hands.

Foreign companies maintain that some crucial technology was stolen from their imported trains. But more importantly to domestic audiences is the perception of a coverup. Initial reports of how the accident occurred are already being partly contradicted by reports in the official media.

July 21, 2011

Perhaps I’ll skip the tour of China after all

Filed under: China, Food — Tags: — Nicholas @ 13:39

I’ve always been a fussy eater, so David Sedaris’s account of a few meals during his visit to China have probably deterred me for good:

Most restaurants had quit serving lunch, so we stopped at what’s called a Farming Family Happiness. This is a farmhouse where, if they’re in the mood, the people who live there will cook and serve you a meal.

One of the members of our party was a native of Chengdu, and of the five Americans, everyone but Hugh and I spoke Mandarin. Thus we hung back as they negotiated with the farm wife, who was square-faced and pretty and wore her hair cut into bangs. We ate in what was normally the mah jong parlour, a large room overlooking the family’s tea field. Against one wall were two televisions, each tuned to a different channel and loudly playing to no one. On the other wall was a sanitation grade — C — and the service grade, which was a smiley face with the smile turned upside down.

As far as I know there wasn’t a menu. Rather, the family worked at their convenience, with whatever was handy or in season. There was a rooster parading around the backyard and then there just wasn’t. After the cook had slit its throat, he used it as the base for five separate dishes, one of which was a dreary soup with two feet, like inverted salad tongs, sticking out of it. Nothing else was nearly as recognisable.

Of course, after visiting Japan with their renowned degree of cleanliness, his arrival set the tone rather too well:

This was what I had grown accustomed to when we flew from Narita to Beijing International, where the first thing one notices is what sounds like a milk steamer, the sort a cafe uses when making lattes and cappuccinos. “That’s odd,” you think. “There’s a coffee bar on the elevator to the parking deck?” What you’re hearing, that incessant guttural hiss, is the sound of one person, and then another, dredging up phlegm, seemingly from the depths of his or her soul. At first you look over, wondering, “Where are you going to put that?” A better question, you soon realise, is, “Where aren’t you going to put it?”

I saw wads of phlegm glistening like freshly shucked oysters on staircases and escalators. I saw them frozen into slicks on the sidewalk and oozing down the sides of walls. It often seemed that if people weren’t spitting, they were coughing without covering their mouths, or shooting wads of snot out of their noses. This was done by plugging one nostril and using the other as a blowhole. “We Chinese think it’s best just to get it out,” a woman told me over dinner one night.

And that’s without quoting any of the learned discussion of bodily wastes . . .

July 20, 2011

Another aspect of China’s amazing economic growth

Filed under: China, Economics, Law, Technology — Tags: , , , — Nicholas @ 07:28

Steve Jobs might want to look at the Chinese market a bit more carefully . . . something’s happening that he may need to pay closer attention to:

The Western news media is replete with pithy descriptions of the rapid changes taking place in China: China has the world’s fastest growing economy. China is undergoing remarkable and rapid change. This represents a unique moment for a society changing as quickly as China.

You probably read such things in the paper every day — but if you have never been to China, I’m not sure you know quite what this means on a mundane level. As I’ve mentioned elsewhere on this blog, in the 2+ years that RP and I have been in our apartment, much of the area around us has been torn down, rebuilt, or gutted and renovated – in some cases, several times over. I had the thought, only half-jokingly, that when we returned from a couple months abroad, we might not be able to recognize our apartment building. Or that it might not be there at all.

As it turns out, my fears were baseless — our scrappy little home remains. The neighborhood, however, has definitely kicked it up a notch or seven. Starbucks has opened not one, but THREE branches (that I encountered) within a 10 minute walk of one another. An H&M has opened across from our apartment building. These are the kinds of major Western brands that were previously only represented in Kunming by fast food chains like McDonald’s and KFC. Our neighborhood has quickly become the swanky shopping center of the city.

Update, 21 July: Andrew Orlowski thinks I’ve been taken in by a non-story:

Some stories are so unusual, you immediately wonder if they’re too good to be true. On Tuesday, a Western NGO in China posted a remarkable tale, reporting that ingenious Chinese retailers in a medium-sized provincial city called Kunming had cloned an Apple Retail Store, faithfully reproducing the staff T-shirts, furniture, display material, and name tags.

[. . .]

But another 10 seconds with Google would reveal that in China, as in the UK and many other countries, Apple has a network of authorised resellers. Apple lays down very strict guidelines on how the resellers must present the gear. The sales material is Apple’s, and the specifications are extremely precise. And to be an Apple “Premium Reseller”, you have to look a lot like an Apple Apple Store, but naturally, you can’t call yourself one. There are hundreds of these, with Apple manufacturer Foxconn’s brother Gou Tai-chang planning 100.

[. . .]

Think of it like this: if you had a Jaguar showroom, anywhere in the world, would you operate from a dodgy lock-up and advertise it with a hand-painted sign? I thought not. You’d want it to look as slick and expensive as the real thing. I’m not sure why we expect Chinese Apple resellers not to do so, too.

July 2, 2011

“I remained somehow reluctant to conclude that the Communist Party of China would flat-out lie”

Filed under: China, History, Media, Politics — Tags: , , , , , — Nicholas @ 10:10

A tale of naivete about the Peoples’ Republic of China through the eyes of an American sympathizer:

The first time I tried to go to China was in 1967, the year after I graduated from college. My father was a radical leftist professor who admired Mao Zedong. And that influence, along with the Vietnam War protests — a movement in which I was not only a participant but an activist — led me to look at socialist China with very high hopes.

I was living in Hong Kong and wrote a letter to Beijing. A few months later I received a charming reply on two sheets of paper that looked like they had been labored over for days by a Red Guard with little English and a faulty typewriter. The letter explained that the Chinese people had nothing against me, but that I was from a predatory imperialist country and could not visit the People’s Republic. Before I left Hong Kong I bought four volumes of “The Selected Works of Mao Zedong,” and, rather grandiosely, ripped the covers off of them so that I might carry them safely back to the imperialist US.

In May, 1973, however, I got another chance. A year earlier, in April 1972, the Chinese ping-pong team had visited the US to break a twenty-three year freeze in diplomatic relations, and I had served as an interpreter. I made a good impression on Chinese officials on that US tour, in part because I led four of the six American interpreters in a boycott of the teams’ meeting with President Richard Nixon at the White House. (Nixon had ordered the bombing of Haiphong just the day before; to me, small talk in the Rose Garden just didn’t seem right.)

H/T to Tim Harford for the link.

June 21, 2011

Chinese high speed trains to run slower than planned

Filed under: China, Technology — Tags: , , , , — Nicholas @ 13:02

They’ll still qualify as high speed trains, but they’ll only travel at speeds up to 250kph instead of the 385kph they were designed to achieve. The problem is safety concerns:

The Chinese government has announced a significant lowering in the top speed its hallmark Beijing-to-Shanghai high-speed train will be allowed to run at when it opens later this month after a review of safety, shoddy workmanship and corruption.

The new service halving the 10-hour rail travel time between China’s political and business centres was meant to be the flagship project of a massive $400-billion program to give the country the most extensive bullet train network anywhere.

But the announcement last week by the Railway Ministry that trains on the new line will only be permitted to run at about 250 kilometres per hour instead of the projected 380 km/h has taken the bloom off the opening.

The restriction follows a review by officials stemming from the sacking in February of the railway minister, Liu Zhijun, and the deputy chief engineer of the department, Zhang Shuguang.

The concerns about safety are not at all unwarranted:

Contractors are said to have skimped on using expensive hardening agents when making the concrete for the rail bases. These ties are predicted to crumble within a few years. And there is said to have been a similar shortage of strengthening ingredients included in the concrete used to build bridges and their supporting columns.

A high speed train requires the right-of-way to be engineered to a much higher standard than ordinary passenger or freight rail lines. If too many corners have been cut in this construction, it would be insane to allow the trains to run at full speed until the entire line has been inspected, tested, and problems addressed. If there were even greater “economies” taken during construction, it might not be safe to run the trains at any speed.

And what’s a story like this without a bit of trash-talking from a rival high speed railway operator:

“The difference between China and Japan is that in Japan, if one passenger is injured or killed, the cost is prohibitively high,” he said. “It’s very serious. But China is a country where 10,000 passengers could die every year and no one would make a fuss.”

That’s a quote from the chairman of Central Japan Railway, which runs the Tokyo-Osaka Shinkansen service.

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