The China Thread

[Razgovory]

Between Shadowrun, Battletech and Earthdawn, FASA more than earned my respect.

The current owners of the FASA trademark have (and had) basically nothing to do with those three Franchises, IIRC.

I didn't even know the company was still around.

[jimmy olsen]

Chinese adherence to "noninterference" is a sham! I'm shocked, shocked!

http://www.dailystar.com.lb/Opinion/Commentary/2014/Apr-09/252721-japan-is-looking-at-the-crimea-annexation-with-trepidation.ashx#ixzz2yLSObDj5

China's response to the crisis in Ukraine was particularly revealing. For three decades, China has proclaimed "noninterference" in the internal affairs of sovereign states as the most important rule governing international relations. But when Putin invaded Ukraine, China showed the hollowness of its adherence to this principle. Instead of condemning Russia for invading and annexing Crimea, it abstained at the United Nations Security Council and has offered more criticism of Ukraine's new popular government than it has of Putin's thuggish behavior.

Every country in Asia is bound to draw only one conclusion from China's tacit approval of Putin's Crimean landgrab: China, too, thinks that might makes right, and if it believes that it can get away with invading disputed territories, whether in the South China Sea or in the Indian Himalayas, it will do so. As a result, effective deterrence will require Asian countries to strengthen their defenses and unite to demand adherence to international law, so that China understands that any Putin-style land grabs will cost its economy dearly.

[jimmy olsen]

Is the bubble finally bursting?

http://www.forbes.com/sites/gordonchang/2014/04/13/china-property-collapse-has-begun/

China Property Collapse Has Begun

Nothing is going right for Hangzhou at this moment.  Walmart will be closing its Zhaohui store in that city on April 23 as a part of its overall plan to dump marginal locations—about 9% of the total—in China.


Thanks to the world's largest retailer, another large block of space in Hangzhou, the capital of Zhejiang province, will go on the market at a time when there is generally too much supply.  The problem is especially pronounced in the city's premium office market.  Hangzhou's Grade A office buildings at the end of 2013 had, according to Jones Lang LaSalle, an average occupancy rate of 30%.

The real weakness, however, is Hangzhou's residential sector.  The cause is simple: massive overbuilding.  Sara Hsu of the State University of New York at New Paltz writes that Hangzhou faces "burgeoning swaths of empty apartment units."

Hangzhou's market has not yet collapsed.  There are still secondary sales, for instance.  Singapore's Straits Times reports Allen Zhao, a businessman, has been looking to sell his two-bedroom flat in Hangzhou for 2 million yuan.  His neighbor just let go a similar unit for 1.7 million.  If Zhao also sells for that amount, he will make a profit, but he will be disappointed.  "That is not much more than the price I paid in 2012," Zhao told the paper.  "Now I'm regretting not selling earlier—more bad news about the property market keeps coming in every day."

New homes also face price pressure.  Developers in Hangzhou are now offering deep discounts, and investors and owners are noticing.  And not just in that city.  "It seems that the 30% price cut in Hangzhou really changed the way Chinese people think about real estate," writes Anne Stevenson-Yang of J Capital Research, "and I doubt there is any turning back from here."

Not every developer is offering such deep discounts, but as Stevenson-Yang tells us the city has become the symbol of a market in distress.  China Central Television on the first of this month devoted a segment to the problems of the "unstoppable price decrease" in Hangzhou property in its Economic 30 Minutes show, and discounts in that city, the Wall Street Journal notes, could be "a signal of broader market weakness ahead."

The real estate market in Hangzhou looks like it has just passed an inflection point.  It is not so much that fundamentals have deteriorated—they have been weak for some time—as that people's mentality has changed. 

As state-run China Central Television explained, the problems in Hangzhou, once the world's largest city, began on February 18.  Then, the North Sea Park development began offering deep discounts.  Rumors that the developer had cash problems started a chain reaction across the city.  It did not matter that North Sea Park issued denials.  Other developers began offering either deep discounts or large incentives, but the tactics did not work.  By then, there were almost no buyers.

Now, the problem of no buyers is spreading across the country.  Sara Hsu notes China's residential markets are becoming inelastic.  "Once consumers stop buying," she writes, "deep discounts are ineffective in drawing them back."  People aren't buying because they believe prices will decline further.

According to the National Bureau of Statistics, new home prices across the country are still going up, but percentage increases have now declined for three consecutive months, signaling a peaking.

Official statistics do not seem consistent with the general trend of reports, but in any event severe problems are evidently ahead.  The secondary property market has tumbled, with sales falling by more than half in Q1 2014 from the same quarter in 2013.  Speculators have either left the domestic market or have sold off holdings.  Rich Chinese, now interested in foreign holdings, are also shunning their home market.  Foreigners, who own only an infinitesimal portion of China's property but who are a bellwether nonetheless, are investing at the slowest pace in at least a decade.  Middle class Chinese are also largely out of the market.

And that's not all.  China property trust sales plunged 49.1% in Q1 2014 from the previous quarter, from 99.7 billion yuan in Q4 2013 to 50.7 billion yuan.  The precipitous fall was due in part to the failure last month of developer Zhejiang Xingrun Real Estate, which had 3.5 billion yuan of indebtedness.

Moreover, just about everyone expects more developers to close their doors.  For one thing, the central bank is not injecting liquidity as fast as it once did.  And interest rates are increasing, the reason why a Finance Ministry one-year bond auction failed on Friday.  Many private developers had gambled that property prices would rise faster than interest rates, but that now looks like a losing bet.  Zhejiang Xingrun, for one, became insolvent after it had borrowed at ultra high rates.

China is at the point where problems are feeding on themselves.  Pessimism about property, which accounts for about 15% of China's gross domestic product, is beginning to affect the broader economy.  Declining property values look scary, despite cheery statements from government officials who assure us the property bubble is "not big" or analysts who say that the problems are not "systemic."  But the Chinese don't look like they are buying either of those views.  "If this continues, it will have immense impact on the whole Chinese economy," says an unidentified Hangzhou real estate salesman on Economic 30 Minutes.  "Without question, everyone thinks there is a bubble."

The People's Republic in the "reform era" has not suffered a nationwide property crash.  Analysts say the problems in Hangzhou are "regional," but now fundamentals and market sentiment either are or will be pushing markets down across the People's Republic.

"The banking system and the shadow banking system are becoming concerned about exposure," says David Cui of Bank of America BAC +1.46%.  "Once people refuse to provide credit to developers, their balance sheets will be under pressure, forcing them to cut prices.  Once enough of them cut prices, fewer people would buy because most people buy property only when they think the price is going up.  If this persists, it will turn into a vicious loop."

Premier Li Keqiang has a few tools at his disposal, but they look insufficient to stop a general collapse of property prices across the country.  The problems, deferred from late 2008 with massive state spending, have simply become too large.  And we must remember that he works inside a complex, collective political system that is generally unable to meet challenges swiftly.

But that does not matter.  There is little any leader can do.  Collapses occur when people lose confidence.  That is now happening in China.

[jimmy olsen]

DOOM! China's economy will implode and take the rest of us down with it!

http://blogs.wsj.com/chinarealtime/2014/04/15/too-much-of-a-good-thing-a-china-property-glut-faq/

Too Much of a Good Thing: A China Property Glut FAQ

China's smaller cities are now the scene of a housing glut, which could undermine China's growth. What are the possible consequences? How are developers reacting? Is the government doing anything about it?

Below WSJ reporters Esther Fung and Bob Davis answer those and other questions. 

Why are the recent price cuts so bad? Isn't this just the market at work—less demand, ergo lower prices?

The same could have been said for the U.S. in 2007. Falling prices in Las Vegas, Bakersfield, Miami were just the market at work.  The problem is that if prices fall too far, they don't invite more people to invest in property. Just the opposite. Would-be buyers keep their wallets closed, fearing that the value of a home will go down in value.

That's particularly a problem in China, where people have thought for 20 years that real estate prices can only go up in value. If that psychology switches, it's a huge problem.

There was concern that the property bubble had burst in 2011. What's different now? 

In 2011, the big worry was  escalating prices in China's major cities putting apartments out of the reach of all but the rich. The central government implemented property curbs, such as limits on multiple home purchases, to rein in speculation and frothy prices. After two tough years for developers, prices started heading up again smartly last year.

What makes the current problem different is that a) the problem is more widespread, hitting lots of small and medium-sized cities, b) the issue is a glut rather than rising prices, and c) China's finances are tied ever more tightly to real estate.

Since 2008, debt in China has grown at a pace similar to the U.S, Europe, Japan and South Korea before they fell into deep recessions. One big reason for the run-up in debt is lending to real estate developers. If developers can't afford to make payments on their loans because they can't sell enough apartments, China has a big problem.

Speaking of which, how are developers paying their bills?

Many construction companies are getting paid in apartments as developers become more and more cash-strapped, according to Zhou Liping, a property consultant at Jiangsu Lianmeng Property Consultancy. "It's quite common," he said, adding that some of these construction companies then use the apartments as collateral when they take on bank loans.

Are there signs of construction workers losing their jobs?

Certainly it's a danger. Unfortunately, unemployment data is unreliable in China and it isn't counted by occupation. So far, there is no sign of widespread job loss. There are still  more jobs than workers seeking jobs, largely as a result of demographic changes that are reducing the size of the Chinese workforce.

What are some signs that the growing glut is having economic ripples?

Copper prices have been falling since 2010, with analysts blaming slack demand in China as one reason. Copper is used in roofs, gutters and building expansion joints. Meanwhile, ArcelorMittal, the world's largest steelmaker, has forecast slower growth in Chinese steel demand this year due to more muted construction demand growth.

Retail sales growth has also slowed recently, due in part to falling growth in sales of appliances and furniture, both linked tightly to apartment purchases.

What is the government doing about it?

The central government has indicated that it would allow local governments to adopt their own market regulations rather than implement a one-size-fits-all policy.

In some areas, local governments are trying help out. In Fenghua, government officials are trying to stave off a default by a local developer. In Changzhou, the government has been trying to keep discounts to a minimum to prop up the housing market.  In Yingkou, the government has reduced fees and taxes for new purchases and made it easy for new buyers to get the residence permits necessary to obtain social welfare benefits, including public education for their children. So far, these measures have had only a limited impact on boosting sales.

Does this mean developers will finally start to cut back on their headlong, hell-for-leather building?

Some of China's largest developers are now trying to focus again on China's biggest cities, where demand is stronger. But why do developers keep building in problem cities despite obvious lack of demand? Why did U.S. developers do the same thing? Developers are optimists and salesmen by nature. Each thinks that its project will thrive even as others don't.

According to Nomura, profits for a group of 142 listed property developers in China rose 581% between 2006 and 2012 and never fell during any of those years. Other non-financial companies saw profits rise 64% during that same period and profits sometimes fell year-to-year for that group.

"China's real estate developers are behaving like internet start-ups," says Mark Williams, a China economist at the Capital Economics in London. "They're focusing on grabbing market share in a growing market, but the smaller and medium-sized cities they are in aren't growing rapidly."

Follow Bob Davis on Tw

[MadImmortalMan]

Well, you know.

Only so many ghost cities to go around before we have to start exporting them. 

[Josquius]

Is the bubble finally bursting?

Stumbled on this one myself today. Interesting. Hopefully the west is on steady enough footing by now that it won't take us down too,.

[Norgy]

Is the bubble finally bursting?

Stumbled on this one myself today. Interesting. Hopefully the west is on steady enough footing by now that it won't take us down too,.

Yeah, that sounds likely. Because our own property markets haven't been a mess for six years or so.

[Josquius]

Is the bubble finally bursting?

Stumbled on this one myself today. Interesting. Hopefully the west is on steady enough footing by now that it won't take us down too,.

Yeah, that sounds likely. Because our own property markets haven't been a mess for six years or so.

Things are better than six years ago at least. Had China gone down in the last few years then the world would have been pretty screwed.

[jimmy olsen]

Because the movie was awesome, that's why.

http://theweek.com/article/index/260001/how-captain-america-won-over-china

How Captain America won over China
A patriotic U.S. film is raking in the renminbi. Why?
By Warner Brown, Foreign Policy | April 17, 2014   

SHANGHAI — Last week, while U.S. Secretary of Defense Chuck Hagel's trip to China was underscoring bilateral tensions between the two powers, the Chinese masses were busy embracing another U.S. visitor. The Marvel superhero sequel Captain America: The Winter Soldier— which (spoiler alert) sees World War II hero Steve Rogers adjusting to life in the 21st century after a 70-year-long sleep, all while battling nefarious elements including spies and Nazis within his employer, a government agency called S.H.I.E.L.D. — has cleaned up at the Chinese box office, selling over 5.6 million tickets and raking in $39.2 million in its opening weekend. That's less than the $95 million the film earned in its debut weekend in the United States, but it's not shabby for China, besting even the opening weekend for 2013's Iron Man 3, which went on to become China's second-highest earning film in 2013. Chinese viewers have embraced the film on Douban.com, China's leading social site for film buffs. Over 20,000 Douban users have collectively given the film an average score of 8.2, edging out even acclaimed Hong Kong director Wong Kar Wai's 2000 tour de force In The Mood for Love.

Why has an avowedly all-American hero proved so popular here? Launching the film on a three-day holiday weekend shortly after its stars toured Beijing certainly didn't hurt. But Winter Soldier also resonates because it keeps the hero's fundamental patriotism intact while modernizing his conflict for a complicated new era, pitting him against enemies burrowed deep within the government he serves. "[The new villain] is the very country he loves and protects," writes one Douban reviewer. "To love one's country isn't the same as loving one's government: This is the main draw of Captain America."

These and other Douban authors implicitly acknowledge that a film tackling such themes — even hidden behind the guise of an imagined superhero — could never be made under the watchful eye of China's image-conscious government and its army of censors. One online review, titled "Why is there no Captain China?", tackles the question explicitly. The post argues that Chinese censors would never allow scenes of iconic buildings like Tiananmen Gate or state-run China Central Television's iconic headquarters, both in Beijing, being destroyed: How could such a thing be possible, after all, under the ruling Communist Party's protection? (A superhero would be unnecessary because China's unrivalled People's Armed Police would catch the villain and send him off to re-education through labor.) The best a Captain China could hope for, the user argues, would be a job as a Beijing policeman. Not that China would ever have true villains anyway; would-be filmmakers, the user concludes, shouldn't even think about depicting enemies within the ranks of the government.

Taken together, the mass of Douban reviews also suggest that Winter Soldier continues a tradition in which Hollywood's success in China inspires navel-gazing about the country's domestic film industry and broader culture. In a review titled "Why do we need Captain America?", one user bemoans the lack of masculine heroes in current Chinese films, and laments that earlier folk heroes like kung-fu legends Huang Feihong and Ip Man are no longer suited to the silver screen. These protagonists are "too nationalist," she writes, fending off as they do a parade of foreign devils and other villains from the bad old days of China's "century of humiliation" at the hands of other powers like Japan and Britain. It's a theme for which many other members of Douban's relatively liberal user base have evinced more than a little fatigue.

It would be folly, of course, to chalk Winter Soldier's success in China up to its politically resonant plot alone. Some of the factors at play behind Captain America's successful Chinese conquest are rather simple. One review entitled "The male lead is handsome — that's the only reason" is representative of a sizable star-gazing chunk of the short reviews, while the most popular full-length review is a playful bromantic interpretation of the relationship between two male leads. The appeal of big explosions and eye-catching stars, it seems, transcends borders.

[Ed Anger]

What a load of Cao Cao.

[celedhring]

I saw Ip Man 2 recently and it was a shameless (and unfun) copy of Rocky IV, with an officer of the British colonial army in place of Ivan Drago.



Most recent Chinese films I have seen are such on the nose nationalistic pamflets, that I'm not surprised people are flocking to see actual *fun* stuff like Cap or Pacific Rim (which made an absolute killing in China).

[CountDeMoney]

One online review, titled "Why is there no Captain China?"

Probably because he failed the exams.

[jimmy olsen]

Sounds like a postapocalyptic wasteland. China's Polluted Soil

China Details Vast Extent of Soil Pollution
About a Fifth of Nation's Arable Land Is Contaminated With Heavy Metals

Updated April 17, 2014 9:08 p.m. ET

BEIJING—The extent of China's soil pollution, long guarded as a state secret, was laid out in an official report that confirmed deep-seated fears about contaminated farmland and the viability of the country's food supply.

Nearly one-fifth of the country's arable land is polluted, officials said in the report, shedding unexpected light on the scale of the problem—a legacy of China's three decades of breakneck economic growth and industrial expansion.

"The national soil situation overall does not offer cause for optimism," said the report. "In some areas, soil pollution is relatively severe. The condition of arable land is troubling, with the problem of pollution from industry and mining particularly worrisome."

While China's problems with air pollution are well-documented, environmentalists have warned about the effects of less-visible contamination of the country's land.

"Air pollution is definitely more visible and present, but soil is the last environmental media where pollutants end up," said Wu Yixiu, head of Greenpeace's East Asia toxins campaign. Heavy metal particles in the air and water seep into the land, then "get into the food and affect everybody," she added.

The report, based on a seven-year survey covering 2.4 million square miles, found that about 16% of the country's soil and 19% of its arable land was polluted to one degree or another. The vast majority of the pollution came from inorganic sources such as heavy metals, it said. China's total land area is 3.7 million square miles.

The most common inorganic pollutants found in China's soil were the heavy metals cadmium, nickel and arsenic, according to Thursday's report. Cadmium and arsenic, both known to cause chronic health problems, are byproducts of mining.

Nearly 3% of arable land in China was found to be either moderately or seriously polluted, the report said, without defining what those levels of contamination mean. Pollution was particularly severe in eastern China's Yangtze River Delta, the Pearl River Delta in the south and old industrial zones in the northeast, it said.

Pollution of farmland is of particular concern in China because of how little of it has. According to the most recent national land survey, China had 334 million acres of arable land at the end of 2012, roughly 37 million acres above the government's "red line" for the amount of farmland necessary to feed the country's population.

Already, some 8.24 million acres of arable land has become unfit for farming, China's Ministry of Land and Resources disclosed in December. Environmentalists say the majority of the remaining land is of poor or moderate quality, having been stripped of its productivity by decades of heavy fertilizer and pesticide use.

So much polluted soil means China will likely have to begin importing more food. "China will need to ease pressure on its natural resource base and import more of its food over the long-term," said Fred Gale, an economist with the U.S. Department of Agriculture's Economic Research Service. "Agriculture is impacted by industrial pollution but also creates a lot of pollution itself," he said, citing waste and ecological damage caused by China's growing taste for meat.

In April 2013, the discovery of unusually high quantities of cadmium in batches of rice grown in Hunan—the country's top rice-producing region, as well as a top-five producer of nonferrous metals like copper and lead—set off worries about farmland and sent prices for Hunan rice tumbling by as much as 14%.

Consuming cadmium in excess of the widely accepted standard of 0.4 milligrams per kilogram of rice over a long period can cause crippling pain the bones and liver and kidney damage. Several samples of the Hunan rice tested in 2013 showed levels of cadmium above that standard.

The cadmium disclosure came shortly after the Ministry of Environmental Protection rejected a request filed by a Beijing-based lawyer to release the results of the soil pollution survey. The ministry said at the time the data couldn't be released because it was a state secret.

Authorities have started to give more weight to the risks of environmental degradation.

In December, the Communist Party announced it would scrap its previous gross domestic product-driven performance evaluation system and replace it with one that would judge officials according to a wider variety of criteria, including environmental protection. Three years after an online campaign calling for more accurate information about air quality, most major cities in China now publish hourly data on air pollution levels. In July, the environmental ministry issued regulations requiring all Chinese provinces to establish an online platform for reporting pollution produced by major companies.

"This is a primary step for citizens' right to know about the environmental protection issue," said Dong Zhengwei, the lawyer who pushed for release of the results. He added, "this information is late for the public, but it's still better than nothing."

Chen Nengchang, a soil remediation expert with the Guangdong Institute of Environmental and Soil Sciences, said the report "clears away the image of soil pollution as a state secret and provides more information." But he added that the release is "a gesture" that did little to provide solutions.

Soil remediation—a way of purifying and revitalizing land—is a technically demanding process that can take decades. Heavy metals react differently depending on conditions, making sources of pollution difficult to pinpoint, and efforts to leech them out of the soil can require years of letting fields lay fallow.

China committed to spending 30 billion yuan ($4.8 billion) on the clean up and prevention of soil pollution in its most recent five-year plan, though experts say they expect it would likely cost much more than that.

In Beijing, residents greeted the report with a dose of skepticism and resignation.

"I'm concerned, but I can't fix it. The whole country is the same. You have to eat or you'll starve," said Xiang Ju, a 29-year-old fruit vendor. He added that he thought the problem was probably more serious than the report indicated. "There must be places that haven't been investigated or reported."

Nan Li, a 26-year-old who works in information technology, said he was surprised by the figure but that it ultimately didn't matter whether the government released. "I mean, even if you want to avoid it, there's no way you'll always be able to," he said.

—Joy Ma, Fanfan Wang and Yang Jie contributed to this article.

[Sheilbh]

So this is a little bizarre:
http://slide.news.sina.com.cn/s/slide_1_46203_60589.html#p=21

Apparently this is high school students in Sichuan re-enacting the crucifixion of Jesus for their athletics day

[CountDeMoney]

At least Jesus had his ear buds on Golgotha.