Think Positive

Store owners and other traders from across northwe...

2012-05-25T10:14:29.850+08:00

Store owners and other traders from across northwestern China converge at large covered markets here to buy goods, making Xi’an one of the best places to take the pulse of China’s interior. And now, that pulse feels weak for consumer spending.

Until late March, Ma Xiechuan sold pork at his butcher shop here by hacking large chunks and handing them to lines of customers to take home and carefully slice and dice. But with sales now down by a third, he has so much extra time that he deftly wields his steel cleaver to produce thin slivers, ready for the customer’s wok.

“It’s the fastest downturn in business I’ve seen in more than 10 years here,” Mr. Ma said.

Yian Leilei, a wholesaler of tablecloths and car seat covers, said that sales nose-dived after Chinese New Year on Jan. 23 and had not recovered. Wang Heiyen, a wholesaler of insulated food and beverage containers said his sales were sliding steadily and customers were becoming ever pickier. Ding Lei, the co-owner of a paint and plaster store said his sales had halved since the start of this year. “People are just not buying apartments,” Mr. Ding said. “It was O.K. in 2009. I’ve never seen it as bad as it is now.”

Mayor Dong Jun of Xi’an expressed worry in a post last week on the city’s Web site.

“The economic situation in the whole city from January through April this year is not that optimistic,” he said. “Maintaining the growth rate continues to be very difficult.”

The government should “place stabilizing growth in...

2012-05-25T10:14:23.955+08:00

The government should “place stabilizing growth in a more important position and carry out pre-emptive policy adjustments and fine-tuning more forcefully according to the changing situation,” the cabinet statement said.

An explanatory statement from the official Xinhua news agency drafted on Wednesday and posted on the Chinese government’s Web site on Thursday cited Zhang Liqun, a senior economist advising the cabinet, as saying that, “the sharp slowdown in the economy has aroused attention from policy makers.”

A preliminary reading of a monthly purchasing managers index showed that manufacturing had continued to weaken in May, with the index falling to 48.7 from 49.3 in April; a figure below 50 indicates a slowing sector.

The cabinet called for stimulating the economy through faster construction of railroads, schools, clinics and other infrastructure. With the Chinese economy still heavily dependent on investment spending, some economists are optimistic that China can quickly reignite growth.

“When you’ve got state banks lending to state enterprises to implement the state’s five-year plan, you don’t have a lot of downside to investment,” said Paul Gruenwald, a former International Monetary Fund official in Hong Kong who is now the chief Asia economist at ANZ, one of Australia’s biggest banks.

China has the financial resources to expand government spending sharply. China has a low ratio of debt to economic output, even when sizable local government debts are added to the national debt. Chinese banks have among the world’s lowest rates of loans to deposits, although some banking analysts have questioned whether many loans by state-owned banks to politically influential borrowers will be repaid.

But with the country having finished building much of its infrastructure, it is having a harder time finding further projects that can pass cost-benefit analyses. The Chinese interior has been the biggest beneficiary of infrastructure spending over the last decade, but now shows signs of catching up with the more developed coast.

The Xi’an airport opened a third terminal and another runway on May 3, giving it the capacity to handle as many passengers as John F. Kennedy International Airport in New York, despite considerably smaller daily traffic. Bullet trains connect Xi’an to Zhengzhou, nearly 300 miles to the east, while no fewer than three concentric beltways encircle Xi’an, although traffic jams continue to bedevil the ancient city’s core.

One more big infrastructure project remains: the city opened its first subway line late last year, plans to finish a second line later this year and has begun construction on a third. But crisscross the city these days and there are fewer streets torn up for building projects than in the past.

At the same time, residential real estate construction has slowed sharply after the government imposed a stringent ban last year on the purchase of multiple homes in an effort to discourage speculation and make housing more affordable. Wei Li, a real estate broker in downtown Xi’an, said that prices had fallen 20 percent since the start of this year for new apartments in the hundreds of towers under construction on the city’s periphery, but she said downtown real estate prices were stable. Construction material vendors here, however, say that apartment prices are also falling in downtown neighbourhoods.

Developers across the country have responded to the drop in prices by abandoning the longstanding practice of floodlighting construction sites and working around the clock. They have cut back to one daytime shift, sharply reducing the demand for construction workers.

“It’s getting harder and harder to find work,” complained Li Bo, a construction worker here.

Xi’an is best known in the West as an ancient capital of China, a Silk Road entrepôt that is home to the terra-cotta warriors. But modern-day Xi’an also plays an important role in the Chinese economy as a regional economic hub with eight million residents.

After Barrelling Ahead in Recession, China Finally...

2012-05-25T10:14:02.668+08:00

After Barrelling Ahead in Recession, China Finally Slows

By KEITH BRADSHER
25 May 2012

A nationwide real estate downturn, stalling exports and declining consumer confidence have produced what a Chinese cabinet adviser, quoted on the official government Web site on Thursday, characterized as a “sharp slowdown in the economy.”

Though the Chinese economy continues to expand, construction workers are losing jobs in droves and retail sales grew last month at the slowest pace in more than three years. Investments in fixed assets have increased more slowly this year than in any year since 2001.

The most striking feature of the slowdown is that it extends beyond the coastal provinces, which depend on exports and are closely linked to the global economy, to the country’s far more insular interior, including cities like Xi’an here in northwestern China.

China’s unexpected economic difficulties are starting to unnerve investors in world markets, especially commodity markets, as China is the world’s largest consumer of most raw materials and the second-largest consumer of oil.

A deepening slowdown would ripple across the world economy. Until now, China’s economy barreled ahead mostly unhindered as the main engine of global growth, even as Europe struggled with its government debt crisis and the United States limped along with a crippled housing market.

Government indexes show real estate prices are falling in more than half of the country’s top 70 urban markets, Xi’an among them. Standard & Poor’s Ratings Services and Moody’s each issued reports on Thursday warning that many of China’s real estate developers face a severe cash squeeze as apartment sales slow to a crawl. The developers still owe heavy interest payments on bank loans.

“Weak property developers in China are likely to face a test of their survival this year,” S.& P. said.

China’s economy was 8.1 percent larger in the first quarter of this year than a year earlier, but virtually all of that growth took place last year. The economy barely grew in the first quarter compared with the fourth quarter of 2011, and the second quarter of this year is likely to show even less growth from the preceding quarter, said Diana Choyleva, a China economist in the Hong Kong office of Lombard Street Research.

The World Bank also warned on Wednesday of a slowdown.

“Clearly the economy is much, much weaker than most people thought until recently,” Ms. Choyleva said. “They have a real mess on their hands.”

China is the world’s largest importer of a long list of commodities, like iron ore and copper. It has also been a big buyer of European factory equipment and luxury goods. The United States economy is much less exposed to a slowdown in the Chinese economy, with exports to China representing less than 0.2 percent of American economic output last year.

Benefiting from heavy government spending on highways and other infrastructure and voracious demand for apartments as poor labourers arrived from the countryside, China’s inland cities had continued to expand even when the rest of the world’s economy fell into serious difficulty in late 2008 and early 2009. But now the economic troubles are evident here in Xi’an, an economic cornerstone of northwestern China that serves as one of the country’s largest transportation and distribution hubs and a manufacturing center for everything from bulldozers to aircraft components.

Sun Yufang, a wholesale dealer in Xi’an in ovens, ranges and water heaters, said that residents had nearly stopped outfitting new apartments or redecorating old ones.

“We didn’t really feel the global financial crisis, but this year, we’ve really felt it — I don’t see a solution unless people start buying,” Ms. Sun said, sitting in a spacious shop with no customers in sight. Premier Wen Jiabao expressed concern last weekend about the economy after an inspection tour to Wuhan in east-central China. He then led a cabinet meeting on Wednesday that produced the government’s strongest statement yet.

Chinese couple bury woman alive, sparking outrage ...

2012-05-24T13:09:00.178+08:00

Chinese couple bury woman alive, sparking outrage

Reuters
23 May 2012

Chinese police have arrested a young couple who buried an old woman alive believing she was dead after their car hit the 68-year-old, newspapers said on Thursday, in a case which has sparked outrage over declining public morality.

The couple had been at an all-night karaoke session when they hit the woman while driving in the early hours of the morning in the wealthy eastern province of Zhejiang last month, the official China Daily said.

“A witness said he heard someone crying and saw an elderly woman lying on the ground near (the car),” it cited a policeman as saying.

“A man and a woman got out and put the elderly woman in the car, saying they would send her to hospital.”

But, worried about being arrested for drunk driving and causing the accident and believing she was no longer alive, they buried her near the side of the road, the report added.

However, when police later found the woman’s body they discovered she was still alive when she was buried, and had then suffocated to death, the paper said.

The story has been widely discussed on China’s popular Twitter-like service Weibo, where it has ignited uproar for what some called the immorality of modern Chinese society.

“Such things show that our society really has huge problems it is not facing,” wrote one user.

“People of China, how have you come to this?” wrote another.

China’s economic boom and the growing disparity between the rich and poor have made changing social values a contentious topic, with some lamenting what they see as materialism and a get-rich-quick attitude replacing public morals.

Last year, graphic video footage of a two-year-old child run over by a van and ignored by passersby in southern China sparked similar anger.

Although she felt the price, at 378 yuan a gram, w...

2012-05-23T13:09:26.630+08:00

Although she felt the price, at 378 yuan a gram, was rather steep, she still saw it as 'a value- preserving tool, unlike currencies which are devaluing by the day in this current bad economic environment'.

And there are still risk-takers willing to stake their spare funds on an emerging opportunity: cash-strapped developers.

Ms Li Dan, 36, says that she can get 60,000 yuan in interest by lending 300,000 yuan for one year to a small, struggling property builder.

'I can get 25 per cent returns, and it's safe because the developer uses his property as collateral,' said Ms Li, who owns a computer maintenance company in northern Inner Mongolia.

The bursting of the luxury bubble In the second o...

2012-05-23T13:09:16.107+08:00

The bursting of the luxury bubble

In the second of a three-part series looking at China's slowing economy, China Correspondent Grace Ng examines the shrinking appetite for luxury items.

By Grace Ng
23 May 2012

It is all going a little flat for China's once ravenous investors. One by one, they are seeing their bubbles burst.

After the heartache of the property slump, their more indulgent acquisitions like Chateau Lafite Rothschild wines and Longjing Chinese tea are also losing value.

Prices are dipping across wildly divergent sectors as buyers turn prudent amid tightening credit and souring business confidence.

With China's clouded economic outlook, 'investors are turning cautious', said Ms Qin Haiying, president of a local bank in north- east Liaoning province.

That has cast a pall stretching from the vineyards of Bordeaux to the auction houses in Hong Kong.

Lafite wines, for instance, have been a favourite of super rich Chinese in the past few years. At the height of the bubble last year, a bottle reportedly cost dinner party guests in a swanky restaurant in China an inflated price of about 50,000 yuan (S$10,000) - and there were doubts whether the wine was even genuine.

The retail price of a bottle of 2008 Chateau Lafite has reportedly dropped from a high of 16,000 yuan to between 8,000 yuan and 9,000 yuan.

China's art lovers are shying away too. Chinese bidders made up only 20 per cent to 25 per cent of the US$316 million (S$401 million) of sales from the spring auctions in Hong Kong last month, according to top auction house Sotheby's in reports last week.

In contrast, they accounted for 44 per cent of the US$411 million in sales at last autumn's auctions.

Even China's premier tea, the Longjing from West Lake in eastern Hangzhou city, has suffered a massive drop in value.

Its wholesale price plunged from 6,000 yuan per kg to 1,200 yuan over a few weeks, the People's Daily Online reported last month, citing prices at the Fuzhou Tea Market in southern China.

A key culprit responsible for the cooling investments is tight credit.

Bank loans last month shrank to an estimated 682 billion yuan, from 1.1 trillion yuan in March. This came as banks' ability to lend was curtailed partly by the government's tight monetary policies as well as a 465.6 billion yuan drop in deposits.

Some analysts say nervous companies and individuals have been depositing less yuan and even withdrawing capital from the system as the outlook for the Chinese economy darkens and negative interest rates persist.

Still, there are some bright spots for diehard investors.

After all, Chinese investors are still among the most upbeat in the world about their country's economic prospects, according to a survey by asset management firm Franklin Templeton released on Monday.

Of the 1,000 Chinese polled, 54 per cent are optimistic about China's outlook over the next three years, much higher than the 33 per cent global average who feel that way about their respective countries.

So, some are now looking at jade. Jade prices have spiked 10-fold over the past decade to well over US$3,000 an ounce last year and is expected to rise further this year. 'This year's demand has doubled from last year,' said a representative from Beijing Yu Mei Cui Jade chain company.

Gold is seen as a safe haven too. Chinese people are buying so much of it that they are tipped to become the world's biggest consumers, overtaking India.

China's gold demand bucked the global downtrend by rising over 9 per cent to a record high of 265.7 tonnes in the first quarter from a year ago.

'Further growth in gold consumption is expected in China,' the World Gold Council said in a report last Thursday.

Among the gold hoarders is retiree Li Ruigong, 67, whose latest buying spree during the Labour Day holiday yielded two pendants and a necklace worth 7,000 yuan.

Yang’s comment drew particular ire from foreign ob...

2012-05-23T10:30:24.027+08:00

Yang’s comment drew particular ire from foreign observers because he hosts an English chat show on CCTV called Dialogue, where he invites foreign guests to exchange ideas.

He told The Wall Street Journal this week that he was referring only to a minority of expatriates and that the silent majority are friendly and “travel, do business and make a living here honestly”.

Also on Monday, Yang was quoted by The Guardian as saying that his wording was “very strong and incompatible with my image as host of a professional talk show and I can say for sure I am sorry for hurting those who respect my profession”.

His original posting can still be found on his microblog and despite calls by several foreign bloggers on the mainland for a boycott of the daily show, he is still hosting it.

One foreigner who has lived on the mainland for a decade teaching English at a university, said the current atmosphere made him uncomfortable, citing a Chinese customer who jokingly told his friend, who operates a restaurant, they would report him to the police.

“I think this is the kind of level the xenophobia is at,” he said. “It has achieved a high degree of awareness among the Chinese public, even if most of them aren’t taking it at all seriously as yet. It creates an uncomfortable atmosphere, especially for those of us who feel especially vulnerable, even if we are quasi-legitimate in our status here.” A proper visa for working or studying was difficult to obtain in the first place, he said.

American businessman Michele Scrimenti, who has lived on the mainland for six years, said some elements of anti-foreigner sentiment had always existed in Chinese society, but it was only apparent during times of uncertainty. “I would hope this is an abnormal nationalistic spasm that will fade,” Scrimenti said.

Russian cellist fired for rant on train Beijing o...

2012-05-23T10:30:15.965+08:00

Russian cellist fired for rant on train

Beijing orchestra sacks musician for abusive tirade at woman that has fuelled anti-foreigner sentiment

Ng Tze-wei and Priscilla Jiao
23 May 2012

A Russian cellist caught on camera insulting and swearing at a Chinese woman on a train has been sacked by the Beijing Symphony Orchestra for “damaging its reputation”.

His abuse of the Chinese passenger on the service to Beijing has added fuel to anti-foreigner sentiment circulating online. His sacking came days after a mainland television presenter called for China to kick out “foreign trash”.

The orchestra issued a statement yesterday saying it had dismissed the musician, Oleg Vedernikov.

“His conduct has badly damaged the orchestra’s reputation,” it said. “We have decided to sack him in accordance with orchestra regulations and the terms of his employment contract.”

While many internet users applauded the sacking, some questioned whether the response was proportionate.

It came against a background of recent anti-foreigner sentiment after a British man molested a Chinese woman outside a Beijing subway station two weeks ago and strong nationalist fervour over the South China Sea dispute with the Philippines. The launch of a police campaign to remove foreigners who are staying on the mainland illegally and a call by China Central Television host Yang Rui for the “clearing of foreign trash” have led some foreign observers to question whether xenophobia is on the rise in China. It has also spurred discontent among foreigners living on the mainland.

Vedernikov, the orchestra’s principal cellist, was shown in a video clip refusing to take his bare feet off the seat in front of him after a woman passenger asked him several times to do so during a train journey on May 14. When the woman used a magazine to slap his feet, Vedernikov replied sarcastically in Chinese: “It feels good, like a massage. One more time.” The woman then shouted, “You are a shame to your country,” and threw a plastic bottle at him. In response, Vedernikov called her a “silly ****” and swore repeatedly.

Many internet users praised the sacking, saying Vedernikov deserved it for such gross violation of civil behaviour. “Foreigners enjoy many privileges on the mainland and they are much better treated, which has spoiled them and given them a sense of superiority,” one said.

Other internet users questioned whether it was appropriate to sack an employee for moral misconduct.

The 45-year-old musician posted a video online last week apologising in Russian for his behaviour on the train. But that failed to calm online anger, with some still questioning why it was not in Chinese, given that he swore so fluently in the language.

Meanwhile, the case of the British molester appears to have spurred Beijing police to launch a 100-day crackdown on foreigners who have illegally entered, overstayed or worked on the mainland - the so-called “three illegals”.

Police said many had no proper income, no stable residence or job, and some had turned to crime.

They said a steady 10 per cent annual increase in the number of foreigners entering and leaving the mainland over the past decade had resulted in a mixed quality of people entering the country.

Official data shows that more than 27 million foreigners entered the mainland last year, with police finding 20,000 “three illegals” - in 1995 the number was only 10,000.

Another set of figures shows that in 1980 there were 20,000 foreigners living on the mainland for more than half a year. Last year the number was 600,000, a third of them in Beijing.

CCTV host Yang supported the crackdown on his Sina Weibo microblog on May 16, saying it was necessary to take out the “foreign trash”, who were traffickers, spies or people without jobs from the West.

He called Al-Jazeera’s former China correspondent, Hong Kong-born Chinese-American Melissa Chan, who was expelled from the country last month, a “foreign bitch”.

Beijing orchestra fires abusive Russian cellist A...

2012-05-22T23:42:52.986+08:00

Beijing orchestra fires abusive Russian cellist

Agence France-Presse in Beijing
22 May 2012

The Beijing Symphony Orchestra has fired a Russian cellist who was caught on camera verbally abusing a female passenger on a train, sparking an online outcry over the behaviour of foreigners in China.

The orchestra said its reputation had been “badly damaged” by the actions of Oleg Vedernikov, who was shown rudely insulting a fellow train passenger who repeatedly asked him to take his feet off the back of her seat.

The Beijing Symphony Orchestra said in a statement late on Monday it had dismissed Vedernikov.

“His conduct has severely damaged the orchestra's reputation. We have decided to fire him in accordance with orchestra regulations and the terms of his employment contract,” the orchestra said.

Vedernikov has apologised over the May 14 incident in a video posted online.

But this has done little to dampen the controversy over his actions, which came to light shortly after video footage of a British tourist apparently sexually assaulting a Chinese woman in Beijing was posted on the internet.

The two events have fed into a broader debate over the behaviour of foreigners in China, where many web users on Tuesday welcomed the musician's dismissal.

His sacking comes after police in Beijing last week launched a 100-day crackdown on foreigners working illegally in the Chinese capital, asking residents of the city to report visa violations.

There is no suggestion that the cellist was working illegally.

Bo’s feud with police chief: Trio failed to broker...

2012-05-22T13:46:22.785+08:00

Bo’s feud with police chief: Trio failed to broker peace

New York Times
22 May 2012

Early this year, as then Chongqing party chief Bo Xilai nearly came to blows with his police chief Wang Lijun over his wife’s possible involvement in a mysterious death, three men flew into the south-western Chinese metropolis within a day or two of one another.

They were members of Mr. Bo’s inner court, and they had come to repair the rupture between the strong-willed Bo and his equally driven police chief.

The trio - two powerful businessmen Xu Ming and Ma Biao and a former intelligence agent Yu Junshi - had befriended the leaders years ago. They knew both to be controlling and impulsive, and their goal was to broker a peace.

Mr. Xu, 41, listed by Forbes as China’s eighth-richest person in 2005, had flown in on his private jet.

He and the others held separate meetings with Mr. Bo and Wang. The damage was irreparable.

Mr. Yu rushed home and stuffed a bag with 1.2 million yuan (S$240,000) to take to a bank with Mr. Ma. All three fled on Mr. Xu’s jet to Australia shortly after Wang fled to a US consulate on Feb 6 where he exposed Mr. Bo’s scandal.

But they returned on Feb 10 and have been detained as central suspects or witnesses in the investigation into Mr. Bo’s alleged misuse of power since around March 15, the day the leader was removed from his Chongqing post.

Mr. Bo’s fall has opened a window on how some of his closest allies from his years as a rising official in north-east China became entwined in the social and economic fabric of Chongqing, which he governed for four years.

Now some people associated with the circle have revealed the workings of Mr. Bo’s shadowy court, and of the panic that set in when these ambitious figures realised their world was about to collapse.

‘These are powerful men with their own style,’ said one person. ‘It was all very strange, very abnormal, the way they acted at that time.’

Mr. Xu and Mr. Ma, who came to know Mr. Bo when he was mayor of Dalian city in north-east China in the 1990s, had become involved in land deals in Chongqing after the leader was transferred there. They feared being brought down if Mr. Bo was investigated for corruption, their associates said.

Mr. Yu was the first to come to Chongqing from the north-east, having been sent there by Mr. Bo in 2007 to gather information and build relations before he assumed the posting. A former intelligence officer, Mr. Yu came to know Mr. Bo when he was investigated by the police over his business activities in Dalian and enlisted the help of the lawyer wife of Mr. Bo, then the city’s mayor.

He soon became friends with Mr. Bo, Mr. Xu, Mr. Ma and Wang, who was a police officer in the surrounding province of Liaoning, said people familiar with this history.

Mr. Yu moved in rarefied circles in Chongqing and kept a low profile. Business executives seeking to curry favour with Mr. Bo and Wang sometimes approached him.

As for Mr. Xu, he built up his main conglomerate, Dalian Shide, in the 1990s by winning contracts from Dalian’s officials. Its holdings range from home appliances to finance to building materials.

‘Bo Xilai would always give Xu Ming advantages in doing business,’ said one person.

Mr. Xu also received generous loans from state banks, including from China Guangfa Bank, where Mr. Ma was a branch chief. Mr. Ma left the bank years ago and started an insurance company.

After Mr. Bo arrived in Chongqing, he and Mr. Xu set up several companies to develop Chongqing real estate, according to financial records and information from government and company websites.

The companies bought at least a half-million square metres of land in Chongqing, according to Chinese news media reports.

Crews held by N Koreans return home All 28 fisher...

2012-05-22T12:18:17.867+08:00

Crews held by N Koreans return home

All 28 fishermen are released alive after 13 days in a dark room filled with rotting fish, and some suffered regular physical beatings

Stephen Chen
22 May 2012

Three Chinese fishing crews held for ransom by North Koreans for almost two weeks returned to their home port of Dalian, Liaoning, yesterday, ending a tense diplomatic crisis.

All 28 fishermen captured were released, the website of the Communist Party mouthpiece People’s Daily said.

Previous media reports had stated 29 Chinese fishermen had been captured but in fact one had left his vessel because of sea sickness shortly before the ships ran into three North Korean gunships in the Yellow Sea on May 8. State media said the central government had been unaware of his departure due to a lack of radio contact with the boats after their capture.

Sun Caihui , the owner of one of the boats, said yesterday all missing crew had returned and were receiving medical treatment after enduring almost two weeks of confinement, starvation and mental and physical abuse in North Korea.

He was deeply shocked by his crew’s brutal mistreatment.

The entire crew had been confined inside a garbage compartment and told to rot with the fish until their relatives paid a ransom of 400,000 yuan (HK$488,902), Sun said.

“They ate, slept and had to relieve themselves in a dark room filled with rotten, dead fish,” he said. “It would be difficult enough for a single person to spend a day in such an environment. I cannot imagine what my best shipmates had to cope with in order to survive over 13 days.”

The North Koreans increased the frequency of beatings as time dragged on, and some fishermen had suffered so much physical abuse in recent days that they had to be kept in hospital despite being desperately keen to go home, Sun said. People’s Daily Online said three fishermen needed to remain in hospital due to the effects of physical abuse.

“My crew were on the verge of mental collapse when they set foot on Chinese soil, and so were their anxious families,” Sun said. “Similar incident have happened many times before and some nice folk have been killed because of the failure to pay ransom in time.

“This is the first time that people have come back ‘free of charge’, and I think the Chinese government has never worked so hard as it did this time to save its fishermen from the notorious North Koreans.”

All three boats had suffered huge losses and it would take a long time to make them seaworthy again as the North Koreans had removed almost everything of value on board, Sun said. He claimed his boat had suffered 700,000 yuan worth of damage, losing items such as nets and fuel.

“The North Koreans seem much more greedy than the worst pirates,” he said. “They stole every possession from my crew, including underpants. The only item that was left intact was our radio, without which the crew could not find their way home.”

The Foreign Ministry confirmed the boats were missing on Thursday, more than a week after their owners reported their capture.

The desperate owners and the families of crew members, let down by government inaction, sought help on the internet, releasing information about the missing boats on Sina Weibo, the microblogging platform.

That sparked public demands for action, coinciding with calls for a more aggressive response to maritime conflicts with other countries following the long-running stand-off between China and the Philippines at Scarborough Shoal in the South China Sea.

The central government said last week it had demanded the North Korean government ensure the Chinese crews’ safety and legal rights.

North Korea announced the release of all captives on Sunday.

Mayor says he defied Bo on axing Huang Qifan chal...

2012-05-22T12:12:50.397+08:00

Mayor says he defied Bo on axing

Huang Qifan challenged party chief, who yelled and kicked him out of high-level meeting at which Bo Xilai announced decision to sack police chief

Choi Chi-yuk in Chongqing
22 May 2012

Chongqing mayor Huang Qifan openly challenged disgraced party chief Bo Xilai at a high-level meeting early this year when Bo announced his decision to sack the municipality’s police chief, Wang Lijun.

A source familiar with the Chongqing municipal government quoted Huang as telling a meeting of top-ranking municipal officials in mid-April, soon after Bo’s membership of the Communist Party Politburo was suspended, that: “During a meeting with standing committee members of the party’s municipal committee, when he [Bo] brought up the suggestion of sacking Wang as police chief, I raised the question of whether it was necessary to ask for the central leadership’s approval beforehand.

“All of a sudden, he [Bo] got so infuriated that he pounded the table, before yelling at me and ordering me to get out, right away. I went out of the room and that’s why I did not vote on the decision to remove Wang.”

The source said: “One of his hands kept trembling when he recalled that incident.”

The news of Wang’s dismissal as Chongqing’s police chief broke on February 2, a few days before he tried to defect at the US consulate in Chengdu , the capital of neighbouring Sichuan province.

Beijing-based independent political analyst Chen Ziming said Bo, well-known for his fiery leadership style in Chongqing, had made up his mind to protect his family and sack Wang after the alleged murder of Briton Neil Heywood. Bo’s wife Gu Kailai is a suspect in the alleged murder.

“Bo was well aware that the firing of his police chief needed the central government’s consent in the first place,” Chen said. “But in the hope of having things done in accordance with his will, he chose to use an overriding … attitude to overwhelm potential opponents.”

Chen said Wang’s removal was a turning point in the whole scandal and if what Huang had said was true, he had obviously managed to distance himself from Bo’s grave mistake by failing to support Bo’s decision to cover up the alleged murder.

“It is more likely that Huang has been totally kept in the dark about the alleged killing of the British businessman,” Chen said.

“Just like Han Zheng’s case, the central leadership will keep Huang and maintain Chongqing’s status quo, as long as they succeed in finding a handy excuse to do so. The last thing they would like to do is to dismiss both the party and government heads of a region at the same time.”

Han, Shanghai’s mayor, was reportedly implicated in the scandal surrounding disgraced Shanghai party chief Chen Liangyu, who was sacked for corruption in 2006 and later jailed, but Han kept his job after Chen’s downfall.

The source said Huang was in almost no danger of being dismissed because of the Bo scandal.

Another source said the close ties between Huang and Wu Bangguo, who ranks No2 on the party’s all-powerful Politburo Standing Committee, might also have played a role in keeping Huang safe.

Huang helped Wu tackle debt problems in the northeast in the 1990s, the source said.

It is widely believed that the deposing of Wang was one of the key factors that prompted him to break with Bo, his boss and former close ally. Huang, Wang’s boss, rushed to Chengdu in a failed attempt to urge him to return to Chongqing, prompting some to link him to the Bo scandal.

Tycoons seek wives in dating contest Sally Wang 2...

2012-05-22T12:07:11.371+08:00

Tycoons seek wives in dating contest

Sally Wang
22 May 2012

More than 300 women are vying to tie the knot with one of 11 super rich men in a contest that takes the dating game to a whole new level.

A single men’s club in Guangzhou picked the contestants from 2,800 applicants using a vigorous screening process that included everything from psychological tests to face-reading to plastic surgery exams to make sure the women have not enhanced their looks, the Yancheng Evening News reported yesterday.

The club will whittle down the 320 contestants - ranging from a beauty queen to white-collar professionals - in 10 events across the county that started on Sunday at The Garden Hotel in Guangzhou. They will have to meet exacting standards from the billionaires. One man is even demanding a virgin.

The men being offered up for betrothal each claim to have at least 100 million yuan (HK$122 million) and represent industries including clothing, property, finance and chemicals manufacturing. The richest one claims to be worth more than 10 billion yuan.

Organiser Li Zhuo told the newspaper that the tycoons had to try harder to find the right partner. Otherwise, they might end up taking mistresses or wind up with children who were rebellious or showed off their wealth.

“We are engaged in selecting excellent wives for entrepreneurs and high-quality mothers for the affluent second-generation in a professional way,” Li said.

The contestants are aged between 19 and 56 and hail from places as far afield as Australia and Singapore. The club aims to select 28 finalists to mingle with the bachelors at a two-day matchmaking event next month.

The contest comes amid a debate over a growing focus on material wealth on the mainland. The central government has greatly restricted primetime entertainment after a dating show craze that drew international headlines in 2010 when one young female contestant dismissed a suitor by saying she would “rather cry in a BMW than laugh on a bicycle”.

Although not televised, this latest contest appears to raise similar issues. The richest contestant, who has been described as a well-known entrepreneur, divorced and in his 40s, offered the club 5 million yuan to find him the perfect wife.

Aside from his specific demands on age, weight and appearance, he also wants a virgin.

The club has offered 50,000 yuan to anyone who recommends a woman that the bachelor ends up taking out on a date. If a relationship develops, the man has promised the referee a 3 million yuan apartment.

One contestant said she thought she was applying for a normal dating party and did not realise the bachelors were wealthy. However, she said it was understandable that rich men would use such a forum to find brides. “This is the way the rich people do things,” she said. “If I were that rich, I would choose among the applicants also.”

Some contestants said they did not think they were too materialistic. They said they were an only child in their family and they needed more money to help their parents.

Wen He, a Guangzhou marriage consultant, said seeking wives through a contest was a game for the rich, but wealth could not guarantee a happy marriage.

Professor Ji Yingchun, a sociologist on family studies at the University of North Carolina, said the contest showed the trend of commercialisation of women on the mainland. As women could not get proportionate rewards from their work, some of them pursued what they wanted through marriage.

I got to say it and it's hard for me, You got ...

2012-05-22T11:56:55.000+08:00

I got to say it and it's hard for me,
You got me cryin' like I thought I would never be.
Love is believin' but you let me down;
How can I love you when you ain't around?
And I,

Get to the morning and you never call.
Love should be everything or not at all.
And it don't matter what ever you do;
I made a life out of lovin' you.

Only to find any dream that I follow is dying.
I'm cryin' in the rain.
I could be searchin' my world for a love everlasting,
Feeling no pain, when will we meet again?

Why do you have to be a heartbreaker?
Is it a lesson that I never knew?
Gotta get out of the spell that I'm under,
My love for you.

Why do you have to be a heartbreaker,
When I was bein' what you want me to be ?
Suddenly everything I ever wanted has passed me by,
This world may end, not you and I.

My love is stronger than the universe.
My soul is cryin' for you,
And that can not be reversed.
You made the rules and you could not see;
You made a life out of hurtin' me.

Out of my mind, I am held by the power of you love.
Tell me when do we try, or should we say goodbye ?

Why do you have to be a heartbreaker,
When I was bein' what you want me to be ?
Suddenly everything I ever wanted has passed me by.

Oh, why do you have to be a heartbreaker ?
Is it a lesson that I never knew ?
Suddenly everything I ever wanted,
My love for you, oh,

Why do you have to be a heartbreaker,
When I was bein' what you want me to be ?
Suddenly everything I ever wanted has passed me by

Protecting the retailers Contrary to popular beli...

2012-05-22T00:58:19.400+08:00

Protecting the retailers

Contrary to popular belief, the Lemon Laws actually provide greater protection to retailers. Previously, the only remedy available for defective goods was for retailers to provide a full refund on the goods. Now, retailers have the additional options of repairing or replacing the goods first, and if they are unable to do so within a reasonable time or without significant convenience to the consumer, only then are they required to reduce the purchase price or provide a refund. These additional remedies are usually less costly and are further qualified for the retailer’s benefit: retailers will not be required to repair or replace the goods if doing so will be disproportionately costly. The Lemon Laws define disproportionate cost to mean a remedy that imposes costs on the retailers which, in comparison to other remedies, are unreasonable, taking into consideration the value of the goods and the significance of the lack of conformity to the applicable contract.

In any case, under the CPFTA, the court has the discretion to decide that another remedy is more appropriate than the one sought by the customer. The Small Claims Tribunal is also empowered to dismiss, at any stage, a claim by a consumer which is frivolous or vexatious on such terms as to costs as it thinks fit.

The introduction of the Lemon Laws ensures that consumers have recourse for their grievances, but it is also important to consider whether there is access to these remedies so that they do not remain only as rights on paper. Commencing a lawsuit in court is not appropriate for most consumer claims as the legal costs will overwhelm the value of the claim itself.

Currently, the Small Claims Tribunal is the only inexpensive forum for hearing such claims, but the values of the disputes must be below $10,000, or up to $20,000 with parties’ agreement. The introduction of the Lemon Laws may lead to an increase in disputes being filed at the Small Claims Tribunal. It may be necessary to constitute Small Claims Tribunals which are industry-specific or intended to deal only with matters concerning physical goods under the Lemon Laws, so as to manage the greater number of cases. However, the experience of jurisdictions with similar Lemon Laws, like the UK, indicates that the number of lawsuits do not increase significantly, for the reason that most disputes continue to be settled by negotiation with the retailer.

This leads me nicely to my last point: at the end of the day, we must not lose sight of the bigger picture that the Lemon Laws are meant to encourage best practices among retailers, not to punish them. As Michael LeBoeuf once said: “A satisfied customer is the best business strategy of all.”

K Anparasan is Partner, Litigation & Dispute Resolution Department of KhattarWong LLP

Are consumers’ rights really protected by the Lemo...

2012-05-22T00:58:12.390+08:00

Are consumers’ rights really protected by the Lemon Laws?

By K Anparasan
17 May 2012

When things turn sour: The introduction of the Lemon Laws may lead to a rise in disputes being filed at the Small Claims Tribunal

The new amendments to the Consumer Protection (Fair Trading) Act (CPFTA) and Hire Purchase Act (HPA) - more colloquially known as the Lemon Laws - have sparked off a significant amount of debate since their debut in Parliament. On the one hand, consumers have expressed concern that the Lemon Laws are too vague in its definitions (such as what constitutes a defective product) to proffer any real protection for consumers. On the other hand, retailers are worried about the potential increase in frivolous complaints by consumers and in operating costs.

The key concerns that have arisen from the debates highlight the complex balancing act that Parliament had to undertake in implementing the Lemon Laws. Suffice to say, I believe that the right balance has been struck.

The concept of “non-conformity with the contract”, which is used to define defectiveness, is not new. Article 35 of the 1980 United Nations Convention on the Uniform Law for International Sales uses the concept of non-conformity as the basis for a seller’s liability for the goods he sells: “The seller must deliver goods which are of the quantity, quality and description required by the contract and which are contained or packaged in the manner required by the contract.” This concept can also be found in the consumer protection laws in other jurisdictions, such as the United Kingdom and the United States.

Surely, the widespread usage of the concept of non-conformity carries great significance. It is necessarily vague because it must be broad enough to cover defectiveness in all types of goods. The concept is similar to the legal concept of reasonableness: it is a one-size-fits-all approach that is capable of taking into account the peculiarities of each case while ensuring that a consistent standard is applied across the board. The same can be said for the lack of precise definition of what constitutes a replacement, or what a reasonable time is for the retailer to repair or replace the goods.

It is important that the Lemon Laws are not too rigid as it runs the risk of stifling competition and innovation. At the end of the day, the customers will still be the ones who suffer as an increase in retailers’ operating costs can be easily passed on to them. As astutely noted by the UK Department of Business Innovation and Skills, “excessive regulation may limit consumer choice and, even if intended to protect consumers, can end up costing them more than the benefit it brings”.

One peculiarity of Singapore’s Lemon Laws is that the CPFTA now contains two different definitions of “goods”. The Lemon Laws - found in the newly added Part III of the CPFTA - define goods in the same manner as the Sale of Goods Act, but this definition only applies to the provisions in Part III. Other provisions in the CPFTA still follow the original definition of goods as stated in Part I of the CPFTA, which is arguably wider in scope as it includes intangible personal property.

The more contentious type of good is the voucher. Strictly speaking, vouchers are not covered by the new Lemon Laws, as vouchers only give consumers the right to obtain goods. Websites like Groupon and Big Deal are intensely popular nowadays, and the recent spate of consumer complaints about consumers not being able to redeem the vouchers bought through the websites underscores the need for greater consumer protection. Nevertheless, such consumers are still protected by the general provisions of the CPFTA, as vouchers fall within the scope of “goods” in Part I of the CPFTA. Such consumers may take Groupon to task for engaging in an unfair practice, namely representing in relation to a voucher that another supplier will provide goods or services at a discounted or reduced price if Groupon knew or ought to know that the other supplier will not do so.

Beyond all this, as a result of a coming together ...

2012-05-22T00:56:20.436+08:00

Beyond all this, as a result of a coming together of many autogenous Singapore initiatives and exogenous factors in the region, Singapore has, in the last few years, become the hub for legal services in the region, in particular, arbitration and disputes resolution from Indonesia, India, China plus various Asean nations. Also, a growing number of offshore or cross-border transactions in the corporate, banking, finance and projects spheres are hubbed out of Singapore, often with Singapore law as the choice of governing law.

This trend has far wider implications than growing the work pie for Singapore lawyers. The use of Singapore law or Singapore lawyers or the use of Singapore as a forum for dispute resolution means, in some instances, that the laws enacted by the Singapore parliament could have an extra-territorial effect in the region. It means that the Singapore law approach influences cross-border transactions, enhancing Singapore’s de facto position of leadership and influence beyond its shores.

This regionalisation has also meant that we see more and more lawyers of different nationalities working in Singapore law firms - Malaysians, Indonesians, Vietnamese, Cambodians, Japanese, Australians, Brits and Americans are now working side by side with Singaporean lawyers in Singapore law firms.

Future trends

But what of the future for Singapore law firms?

The pressure of regionalisation and globalisation continues apace. More and more corporations are continuing to look further afield for revenues and profits. More and more transactions are not just cross-border, but multi-jurisdictional. The pressure is on to deliver integrated legal solutions across many borders.

Singapore law firms have historically done this through a “best friends” model with local law firms in other jurisdictions. However, increasingly this is insufficient and a more integrated solution is required.

The legal profession all over is also experiencing consolidation, perhaps not dissimilar to what has occurred in the accounting profession some decades ago. When the dust eventually settles, many believe that we will see truly global law firms, probably more than accounting’s Big 4, but fewer than those that exist today. And to continue to participate in top-tier work, Singapore law firms may well have to be a part of a global firm.

With Singapore’s growing importance as a regional hub for legal services, large international firms see the imperative to add the best Singapore law capabilities. Singapore law firms are finding increasingly that to continue to participate in top-tier legal work and to remain competitive in the war for legal talent, there is a need to be part of a global franchise.

A similar process has already started in Australia - long thought of as a mature, crowded and fully developed market. One by one, major Australian law firms are merging with global ones, except for one which has chosen a Chinese firm.

This tide of globalisation and consolidation that may well see many Singapore law firms merge or form integrated alliances with large global players remains, notwithstanding that the recent Allen and Overy merger agreement with Singapore law firm Allen and Gledhill was called off just before reaching the altar.

Indeed, the latest changes to the Legal Profession Act have enhanced the options available to all players. The new rules, under the misnomer of an “Alliance”, allow a foreign law firm to own stakes and share in up to one-third of the profits of a Singapore law firm, including in local litigation and conveyancing, hitherto sacred cows not even permitted for QFLPs. This is a dramatic, and surprisingly unremarked, change.

With the pressures of Schumpeterian creative destruction in their own markets, Singapore law firms face important and difficult decisions for their future.

Lee Suet Fern is Chairman and Managing Partner of Stamford Law

Staying competitive in a time of transition By Le...

2012-05-22T00:56:08.708+08:00

Staying competitive in a time of transition

By Lee Suet Fern
17 May 2012

The last five years have seen rapid change for Singapore law firms. The next five promise acceleration of change.

The year 2008 saw the opening of Singapore’s domestic legal markets with the granting of six Qualifying Foreign Law Practices or QFLPs to practise Singapore law with certain restrictions. The Singapore government has since intimated that it will grant a second round of licences next year.

These QFLPs licences have been granted to players with global reach and branding: Goliaths whose size and reach make even Singapore’s old and established players look like Tom Thumbs. These QFLP behemoths are effectively large corporations which have already transformed the practice of law into businesses, with machineries for the production process and monitoring efficiency, and with most lawyers, save for a rare few with star billing, just digits in a well oiled factory. These giants also have established and embedded relationships with major banks and financial institutions and multinational corporations.

This altered the landscape for Singapore law firms and raised challenges on many fronts.

High costs

One of the first was costs. In the legal service sector, legal salaries are the overwhelming cost, with office rentals trailing as a distant, albeit not unimportant, second. Almost overnight, in order to attract and retain young Singapore lawyers, Singapore law firms had to raise pay. Not only did annual associates’ packages rise, it also became essential to pay much more in the fixed monthly component.

Sadly, this movement of remuneration upwards, and away from the variable bonus component, created less alignment of interests between the young lawyer and his firm. In turn, this resulted in greater churn amongst young lawyers, including some who, notwithstanding the time and money invested in a legal education, have moved to opening restaurants and wine bars!

The war for talent has thus become hand-to-hand combat on home turf. QFLPs offer the seduction of a global brand-name, their in-house training and the possibility of slaving in an overseas office. Singapore law firms hold out more tangible prospects of career advancement, broader, less pigeon-holed work experiences and client-facing work exposure.

Further, with more players chasing an already crowded market for Singapore legal work, there has been continued pressure on fees which (with rising costs) have squeezed margins for all players in the Singapore legal market, QFLPs and Singapore firms alike.

Singapore firms have not taken the invasion into Singapore legal practice lying down. Many have continued to grow and build on their cross-border practices, continuing to compete with QFLPs based in Singapore for work in Indonesia, China, Vietnam, India, Thailand, Philippines, Cambodia, Myanmar and so forth, with our lawyers working as far afield as Africa and Russia.

Before the granting of the QFLP licences in 2008, foreign firms had used Singapore as a base for their practices in the region. Increasingly, they are seeing a Singapore firm across the table outside Singapore.

Singapore law firms have another asset. Singapore lawyers have always been well regarded for their high standards, knowledge and professionalism. More importantly, unlike many emerging economies, Singapore has a body of experienced, sophisticated and highly regarded practitioners. This has allowed many Singapore law firms to differentiate themselves from QFLPs by their intimate knowledge of the business environment and players in Singapore and the region. This, plus the ability to contextualise any interpretations of laws and regulations, to provide guidance and advice with a read of local markets, is something that a growing body of increasingly sophisticated clients have found invaluable.

Liberalisation As more MNCs invest in Singapore, ...

2012-05-22T00:54:15.326+08:00

Liberalisation

As more MNCs invest in Singapore, and there is a need to cross legislative and regulatory hurdles across various jurisdictions, Singapore’s latest move has been to further liberalise the legal sector. There are now more than 110 foreign law practices in Singapore. Structures have been put in place to allow foreign firms to form Joint Law Ventures and Formal Law Alliances with Singapore firms to enter into certain areas of local practice. In 2008, six foreign firms were granted licences under the Qualifying Foreign Law Practices (QFLP) scheme to similarly practise Singapore law. The Singapore government has recently announced its intent to award more QFLP licences by next year. The law has also been amended to allow foreign lawyers to be more easily called to the Singapore Bar, and for foreign firms and individuals to acquire an interest in local law firms.

Such liberalisation of the legal sector expands the available pool of legal expertise in Singapore to handle complex international disputes. The presence of foreign firms in Singapore, and their ability to practise Singapore law, would undoubtedly attract more international investors to choose Singapore as the place to do business, and the preferred venue to arbitrate disputes.

The message is clear - Asia is where the work is, and Singapore is the place to be. The legal industry needs to be well-equipped, responsive and quick to adapt. Singapore’s position as a leading international arbitration hub and the liberalisation of the legal industry signal the start of an exciting and challenging era which should be welcomed.

Some are sceptical about these changes, and whether Singapore law firms, and Singapore lawyers, benefit from them. They unquestionably do. More than 50 per cent of the arbitrator appointments by the SIAC were Singaporean. More significantly, the quality, complexity and value of cases handled in Singapore have increased, thereby giving Singapore law firms the opportunity to be involved in more challenging work. Singapore lawyers, particularly the younger ones, have opportunities to work with and learn from leading arbitration practitioners from around the world, and develop and hone their own skills. That in turn will make Singapore lawyers more sought after to engage in arbitration work overseas. Far from being a threat, the growth of international arbitration work has provided a boost to the local legal sector, and to the development and retention of local talent. That has certainly been Drew & Napier’s experience.

Consider the alternative of doing nothing. In a globalised world with increasing cross-border transactions, parties will continue to turn to efficient, neutral venues to resolve disputes. Not encouraging arbitration in Singapore will not translate to more court work for local firms. It only encourages parties to go elsewhere to resolve matters. Countries which embrace arbitration will build up their reputations and continue to be the venue of choice, and others will always be trying to play catch up. These are the realities we have to accept. Singapore has made tremendous strides to close the distance with the traditional arbitration venues. We are now deservedly the premier venue for Asia, but others are doing their best to close the gap on us. We cannot afford to let up now.

The real challenge for local firms is to construct a model which will enable them to seize these new opportunities. Whether this is best done by expanding, forming alliances, merging or being assimilated by a foreign or larger firm is a difficult question, but one that must be confronted. The lack of such activity amongst local firms suggests that they are still finding their feet in the new environment, and there is uncertainty about how to more forward. It is, however, unlikely that they can adopt a wait and see approach much longer.

Hri Kumar Nair SC is Director, Drew & Napier LLC

An era of new opportunities Singapore’s position ...

2012-05-22T00:54:06.320+08:00

An era of new opportunities

Singapore’s position as a leading international arbitration hub and the liberalisation of the legal industry signal the start of an exciting and challenging era which should be welcomed

By Hri Kumar Nair SC
17 May 2012

Two things are undeniable: Asia will be the engine of worldwide economic growth for some time and Singapore, if it plays its cards right, will have an important role in this. And Singapore has thus far been doing the right things. The evidence is clear. Businesses, like people, vote with their feet. More foreign companies and banks are opening offices here, more MNCs have chosen to site their regional headquarters here, and more talent is coming to work or explore opportunities.

The experience in the legal sector is no different. This cannot be better illustrated than the explosion of international arbitration work in Singapore, and its growing recognition as the leading international arbitration hub in Asia. In the 2010 White & Case International Arbitration Survey, Singapore was lauded as “the most popular Asian seat”. It ranked third on the list of most preferred seats by companies, tying with Paris and Tokyo, and behind only traditional powerhouses, London and Geneva. Singapore’s standing in international arbitration is most clearly reflected in the number of new cases handled by the Singapore International Arbitration Centre (SIAC). Last year, SIAC saw a significant spike in its caseload, receiving 188 new cases involving parties from over 40 jurisdictions. The total sum in dispute for cases filed in 2011 amounted to $1.32 billion.

These results are stellar, but unsurprising. They are not the result of accident or chance. The arbitration market stands on the shoulders of Singapore’s reputation as an important and conducive venue for commercial activity in Asia. We are a multilingual society, located between the two emerging economic giants, India and China. We are known for our political and social stability, efficiency and cutting-edge facilities. The competence and integrity of our judiciary is second to none. Our laws and political alliances make us a safe and neutral venue for the adjudication of cross-border disputes. Ultimately, our brand is that parties, regardless of origin, can be confident that their disputes will be tried fairly and efficiently in Singapore.

Singapore’s legal regime and institutional framework are also consciously geared towards making us a more arbitration-friendly country. The Singapore Courts constantly demonstrate their support of the international arbitration process, adopting a policy of minimal judicial intervention and a strong emphasis on party autonomy. SIAC is a top-notch arbitral institution which is rapidly gaining a strong foothold. Maxwell Chambers, Singapore’s world-class centre for international arbitration, boasts state-of-the-art facilities and houses arbitration bigwigs such as the International Chamber of Commerce.

More importantly, we are not standing still. The International Arbitration Act (IAA) has been continuously reviewed and revised to meet the needs of the international arbitration process, reflecting Singapore’s growing sophistication as an arbitral jurisdiction.

Tensions built between Mr. Bo and Mr. Wang, the po...

2012-05-22T00:52:34.162+08:00

Tensions built between Mr. Bo and Mr. Wang, the police chief, and things fell apart after they had their explosive meeting on Jan. 28. Mr. Xu beseeched Mr. Yu to fly to Chongqing from Beijing. On Jan. 31, Mr. Yu met with Mr. Wang for an entire night in Mr. Wang’s suite at police headquarters. The next day, his driver switched cars; picked up Mr. Ma, the businessman, at the airport; and drove him and Mr. Yu to the Foggy City Hotel, where Mr. Bo sometimes dined and held meetings. Mr. Ma met with Mr. Bo while Mr. Yu waited in the lobby. “When Ma Biao came out, his face looked ashen,” said a friend of Mr. Yu’s

On Feb. 2, the two made their run to the bank. Mr. Yu told Mr. Ma to take the bag of cash inside by himself so the two would avoid being recorded together on security cameras. Then they flew out of Chongqing. That day, the local government announced that Mr. Wang had been removed from his police chief job.

Mr. Xu flew in on Feb. 3 and met with Mr. Bo. Within a week, he and the other two left for Hong Kong from northern China, and proceeded to Australia. “We thought they weren’t coming back,” one person familiar with them said.

But they returned. Then on March 14, as word quietly spread of Mr. Bo’s purge, Mr. Yu realized that he and his cohorts would be detained. He told his wife and son to go for a stroll that evening outside their Beijing home, so they would not witness the arrival of the police, his wife told a friend. But the police did not arrive until later that night, and the family watched as Mr. Yu was led away.

Edward Wong reported from Chongqing, and Jonathan Ansfield from Beijing. Ian Johnson contributed reporting from Beijing. Shi Da and Mia Li contributed research from Beijing, and Hilda Wang contributed research from Hong Kong.

The first to appear on the scene in Chongqing was ...

2012-05-22T00:52:28.036+08:00

The first to appear on the scene in Chongqing was Mr. Yu, a fixer for the Bo family. He moved here before Mr. Bo arrived in December 2007 for his posting as party chief. Mr. Bo had sent him to gather information and build relations, according to people who have met Mr. Yu, a former intelligence officer for the People’s Liberation Army. Mr. Yu had been posted to Bangkok in the 1990s, but an agent in his network defected, and the members of his group were recalled and punished.

After Mr. Yu left the intelligence service, he returned to his hometown, Dalian, where Mr. Bo was mayor and Mr. Xu was building up his companies. Mr. Yu was investigated by the police over his business activities, and he enlisted the help of Gu Kailai, a lawyer married to Mr. Bo. He soon became friends with Mr. Bo; Mr. Xu, the billionaire; Mr. Ma, the businessman; and Mr. Wang, who was a police officer in the surrounding province of Liaoning, said people familiar with this history.

“Bo Xilai is fascinated by spies, so he likes to make friends with intelligence agents,” said Yang Haipeng, an investigative journalist in Shanghai.

Mr. Yu, well read and well mannered, moved in rarefied circles in Chongqing and kept a low profile.

Business executives seeking to curry favor with Mr. Bo and Mr. Wang sometimes approached Mr. Yu. In 2009, Mr. Bo and Mr. Wang started a crackdown on criminal gangs that was also an offensive against private entrepreneurs and Mr. Bo’s enemies. Fearful of being unfairly ensnared in the crackdown, Yin Mingshan, the founder of Lifan Group, a motorcycle company, arranged a banquet with Mr. Yu, said two friends of the banquet’s organizer. “All the bosses needed protection,” one of them said. Representatives of the company did not answer calls seeking comment.

Right after the campaign began, Mr. Xu and Mr. Ma started real estate projects in Chongqing through a complex web of companies. “Bo Xilai would always give Xu Ming advantages in doing business,” said one person.

In the 1990s, Mr. Xu built up his main conglomerate, Dalian Shide, whose holdings range from home appliances to finance to building materials, by winning contracts from local officials, including a lucrative deal to provide window frames while Mr. Bo was mayor of Dalian. Mr. Xu also received generous loans from state banks, including from China Guangfa Bank, where Mr. Ma was a branch chief.

Mr. Ma left the bank years ago and started an insurance company. After Mr. Bo arrived in Chongqing, Mr. Ma and Mr. Xu set up several companies to develop Chongqing real estate, according to financial records and information from government and company Web sites. Mr. Xu and Mr. Ma have roles in at least three companies founded in 2009: Chongqing Heshengyu Real Estate Development, Chongqing Shenghe Construction and Guanghua Huihuang.

Mr. Xu found ways to keep himself veiled. He sometimes used a Hong Kong company, Golden International Investment, to invest in local companies. Records in Hong Kong list Mr. Xu and three other Dalian Shide executives as the directors of Golden in 2003.

The companies bought at least 123 acres of land in Chongqing, according to Chinese news media reports. Mr. Xu and Mr. Ma often met their allies discreetly in hotels. One sweltering night last summer, Mr. Ma walked with Mr. Yu, the former spy, into the lobby of the Nanshan Lijing Resort, set in misty hills on the city’s outskirts. Mr. Wang, the police chief, greeted them there in a respectful manner, and they dined with Mr. Xu, said one witness.

The resort was known as a rendezvous point for people close to Mr. Bo, and Mr. Heywood’s body was found in a villa there on Nov. 15. Police investigators determined that Mr. Heywood had been poisoned, and suspected Mr. Bo’s wife, Gu Kailai, was involved.

Leader’s Fall in China Put Allies in Peril By EDW...

2012-05-22T00:52:13.800+08:00

Leader’s Fall in China Put Allies in Peril

By EDWARD WONG and JONATHAN ANSFIELD
21 May 2012

Early this year, as a crisis unfolded in the chambers of power here, three men flew into this fog-wreathed riverside metropolis within a day or two of one another. They were members of the inner court of Bo Xilai, the Communist Party aristocrat who ran the city, and they had come to repair a rupture between the strong-willed Mr. Bo and his equally driven police chief.

Just days earlier, on Jan. 28, the police chief, Wang Lijun, had pressed Mr. Bo over evidence tying Mr. Bo’s wife to the death last fall of a British businessman, prompting Mr. Bo to punch Mr. Wang in the face, Mr. Wang later recounted to others. The three men — two of them powerful businessmen and the other a former intelligence agent — had befriended Mr. Bo and Mr. Wang years ago. They knew both to be controlling and impulsive, and their goal was to broker a peace.

The most famous of the three, Xu Ming, 41, listed by Forbes as China’s eighth-richest person in 2005, had flown in on his private jet. He and the others held separate meetings with Mr. Bo and Mr. Wang. The damage was irreparable. The former intelligence agent, Yu Junshi, rushed home and stuffed a bag with 1.2 million renminbi, or nearly $200,000, to take to a bank with Ma Biao, the other businessman, known for his girth. Then all three fled to Australia within days, fearful of the fallout from a possible investigation of Mr. Bo.

Those figures are now being detained as central suspects or witnesses in the Chinese government’s broad investigation into Mr. Bo’s use of power. His fall from the party’s top echelons has opened a window on how some of his closest allies from his years as a rising official in northeast China became entwined in the social and economic fabric of Chongqing, a fast-growing western municipality of 31 million that Mr. Bo governed for four years. The accounts about those allies, which raise questions about Mr. Bo’s relations with tycoons, are based primarily on interviews with six people associated with the circle, who spoke on the condition of anonymity for fear of facing official scrutiny, and a review of financial documents and company Web sites. Together, they reveal the workings of the shadowy court of one of China’s leaders, and of the panic that set in when these ambitious figures realized their world was about to collapse.

“These are powerful men with their own style,” said one person who has met with Mr. Yu. “It was all very strange, very abnormal, the way they acted at that time.”

On Feb. 6, Mr. Wang drove to the American Consulate in Chengdu and told diplomats about what he said was the murder of the Briton, Neil Heywood, which set in motion one of China’s biggest political scandals in decades: Mr. Bo has been removed from his posts, his allies are under scrutiny and his wife is a suspect in the killing.

The three men who fled to Australia have been held for two months. They left after Mr. Wang’s consulate visit, but returned to China in about 10 days on Mr. Xu’s private jet, thinking that Mr. Bo had avoided serious trouble. They were picked up by the police around the time that Mr. Bo was removed as party chief of Chongqing on March 15, according to several people who knew the men or their friends and families. One with security contacts said almost 60 people had been detained.

All three had much to lose. Mr. Xu, the billionaire, and Mr. Ma, the businessman, in particular had become involved in land deals here, and feared being brought down if Mr. Bo was investigated for corruption, their associates said.

The men could not be reached for comment, and employees at companies where they serve as executives declined to answer questions.

It's hard to discern wether classifying people...

2012-05-21T16:40:12.978+08:00

It's hard to discern wether classifying people like this is useful or not. In a lot of societies it seems that people take a different approach to partnering. There's more to life for women in hong kong than getting married and becoming a baby factory I hope though.

speed dating hong kong

REFORM FROM BELOW Premier Wen has been a steady p...

2012-05-21T13:37:07.321+08:00

REFORM FROM BELOW

Premier Wen has been a steady proponent of economic reforms during his decade-long tenure. He has also made repeated calls for accompanying political advancements, although he has been unable to convert that rhetoric into reality.

Under President Hu, political reform has been glacial, lagging well behind the incremental pace of economic reform.

Whether Wen’s likely successor as premier, Vice Premier Li Keqiang, will take up the reform mantle remains to be seen.

Li was immersed in the intellectual and political ferment of the post-Cultural Revolution period that ended in the 1989 Tiananmen Square protests. But his ascent in the party and government since then has been textbook gray.

China’s leadership race is a secretive process of vetting, bargaining and coalition-building, in contrast to the raucous, publicity-soaked race for the White House that takes place in the United States over roughly the same time up until late 2012.

But China’s emerging leaders are learning in their own way to court broader constituencies and potential backers, many of whom appear eager for faster reforms after a decade of President Hu’s stability-above-all tenure.

The Chinese Communist Party remains a top-down body that does not answer to citizens or even its 80 million members. But the increasingly divided, assertive society formed by 30 years of market reforms has created chances for leaders to appeal to distinctive audiences in the hope of building influence, said Chen Ziming, an independent scholar who studies party politics.

“The central leadership doesn’t have the plan or the will to carry out that kind of exploration, so again reform is coming up from below,” said Chen, a former political prisoner who lives in Beijing.

“This shows a broader generational difference, too. They’re showing that they’ll handle things differently,” Chen said of Guangdong’s Wang and his cohorts.

TAOIST LEADERSHIP STYLE

Wang, Shanghai’s Yu and Tianjin’s Zhang are politically nothing like Bo, who courted the conservative old guard with his ‘Red’ campaigns and with calls for more egalitarian growth.

Yu, 67, like Bo, is a “princeling”, the privileged offspring of former Chinese communist leaders or military top brass - but that is where any similarity ends.

Yu and Zhang, though, are likely to play things more conservatively in their party congresses than Wang.

For one, Wang’s position in the top leadership is more secure than Yu and Zhang, who are older and likely to serve at most one term, analysts said. Also, breaking new ground at their congresses is unlikely - and can be risky if they hope to rise.

On Friday, Yu’s work report to the Shanghai congress called for faster and better economic development, while sticking largely to accepted rhetoric on politics, at points mimicking the exact wording of previous speeches by top leaders.

“The development of socialist democratic politics is the unswerving goal of our party,” he said. The Shanghai congress closes on Tuesday.

Lam, the Hong Kong-based analyst, described Yu as the least controversial of the party’s princelings and is acceptable to the outgoing leadership. “He is not known for pushing any radical ideas,” Lam said.

Even less drama was expected of Zhang, 65, a technocrat who helped change Tianjin from a backwater into an increasingly important financial centre.

“What he wants to do at this juncture is try not to make mistakes or offend anyone, to hide ambitions. He will try to ensure the (local) party congress goes through without interruptions or problems,” said the University of Nottingham’s Wang Zhengxu.

(Additional reporting by Melanie Lee in SHANGHAI and Chris Buckley in BEIJING; Editing by Brian Rhoads and Mark Bendeich)