1. NYT: Departing U.S. envoy to China praises growing economic ties
2. NYT - Sinosphere: A parting shot at U.S. ambassador, inspired by Mao
3. WP: Chinese President Xi Jinping takes charge of new cybersecurity group
4.  NYT: China’s president will lead a new effort on cybersecurity
5. WSJ: China's leaders take aim at Internet security
6. WSJ: China's yuan slides against U.S. dollar
7. Bloomberg: China’s yuan drops most on record amid band widening speculation
8. FT: Beijing guides renminbi lower in effort to manage financial risks
9. Reuters: China's commerce ministry to weigh in on global mergers with new rules
10. WP - David Ignatius: China’s assertiveness leaves its neighbors anxious
11.  NYT - Editorial: China's growing stake in stability
12. FT - Joe Biden Oped: We cannot afford to stand on the sidelines of trade

 

13. SCMP:  Scorn and gratitude in China for departing US Ambassador Gary Locke
14. SCMP: Chinese worried about more censorship as Xi Jinping heads new web security panel
15. Xinhua - Editorial: China's economic reform will not follow Jacob Lew's pace
16. Xinhua: China ratifies national days on anti-Japanese war victory, Nanjing Massacre

 

1. NYT: Departing U.S. envoy to China praises growing economic ties 
Gary F. Locke, the departing United States ambassador to China, praised the growing economic ties between the two nations in a final news conference on Thursday but said China needed to make progress in establishing the rule of law and government transparency, and in respecting freedom of expression and human rights. In the wide-ranging talk that touched on an array of diplomatic issues, including points of conflict, Mr. Locke also urged China and Japan to “lower the temperature” on their territorial disputes and spoke of how the United States and China could work together on using cleaner technology to alleviate the dire air pollution in China. “I believe our common interests continue to outweigh our differences, and our economic relationship actually serves as a very steadying influence,” Mr. Locke said in a prepared statement at the start of the 40-minute session with Chinese and foreign journalists, held in the United States Embassy.
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2. NYT - Sinosphere: A parting shot at U.S. ambassador, inspired by Mao 
The departing United States ambassador, Gary F. Locke, gave a farewell news conference in Beijing on Thursday, at which he praised the deepening economic ties between the world’s two biggest economies and urged China and Japan to cool down escalating tensions over a territorial dispute. His carefully chosen words were not well received by the state-run China News Service. Following Mr. Locke’s remarks, it published a scathing review of his tenure modeled after a famous August 1949 essay by Mao Zedong, “Farewell, Leighton Stuart,’’ slamming the last American ambassador under the collapsing Nationalist government in Nanjing. “Farewell, Gary Locke’’ departs from the almost wonkish critique of United States foreign policy offered up by Mao, opting instead for an extended comparison of Mr. Locke, a Chinese-American, to a banana. “Gary Locke is a U.S.-born, third-generation Chinese-American, and his being a banana — ‘yellow skin and white heart’ — became an advantage for Obama’s foreign policy,’’ opened the commentary, written by a person identified as Wang Ping. (Many Asian-Americans consider “banana” an offensive term.) “However,” the commentary continued, “after a while, a banana will inevitably start to rot.’’

Gary F. Locke, the first Chinese-American ambassador to China, at his farewell news conference in Beijing. Ng Han Guan/Agence France-Presse — Getty Images
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3. WP: Chinese President Xi Jinping takes charge of new cybersecurity group 
Chinese President Xi Jinping personally took charge of a new government body overseeing China’s cybersecurity and vowed Thursday to turn China into a “cyber power,” according to state-run media. Xi’s move to head up the new Central Internet Security and Informatization Leading Group comes amid increasing tensions between the United States and China over concerns about cyber-intrusions carried out by both governments. It also takes place on the heels of a crackdown by Chinese authorities on online dissent that has resulted in the arrest and suppression of numerous bloggers. Xi presided over the group’s first meeting Thursday, according to the state-run Xinhua News Agency. He emphasized that Internet security is “a major strategic issue concerning a country’s security and development as well as people’s life and work,” according to Xinhua. “Efforts should be made to build our country into a cyber power,” the news agency quoted Xi as saying. The government released sparse details about the group. Premier Li Keqiang and Liu Yunshan, both members of the Communist Party’s Standing Committee, China’s most powerful body, were named as the cyber group’s deputy heads.
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4.  NYT: China’s president will lead a new effort on cybersecurity 
President Xi Jinping is presiding over a new working group on cybersecurity and information security, China announced on Thursday, a sign that the Communist Party views the issue as one of the country’s most pressing strategic concerns. The government said Mr. Xi and two other senior leaders, Prime Minister Li Keqiang and Liu Yunshan, a member of the Politburo Standing Committee, would help draft national strategies and develop major policies in a field that might include protecting national secrets and developing digital defenses, among other goals. “Efforts should be made to build our country into a cyberpower,” Mr. Xi said in a statement released after the first meeting of the group on Thursday, according to the official Xinhua News Agency.
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5. WSJ: China's leaders take aim at Internet security 
China's government appears to be tightening its grip on online discourse with the formation of an Internet-security committee led by top Communist Party officials. The official China Central Television said the group was set up to address a growing number of cyberattacks and other Internet security issues, and will work to turn the country into a "global Internet power" and promote socialist values. "Doing a good job guiding public opinion is a long-term mission," CCTV quoted Chinese President Xi Jinping as saying. "It requires innovative Internet propaganda, Internet broadcasting discipline." Mr. Xi presided over the first meeting of the committee, the Central Internet Security and Information Leading Group. The deputy heads of the group include the party's No. 2 official, Premier Li Keqiang and a top party official for propaganda, Liu Yunshan. The membership indicates the committee will wield considerable power over the world's largest Internet market by users. Mr. Xi's presence "reflects China's response to ongoing criticism that its activities in this space aren't especially organized and consistent with other governments around the world trying to bring greater coherence to this policy realm," said Jimmy Goodrich, director of global policy at the Information Technology Industry Council, an industry group. "With Xi in charge, he can certainly claim that's not true anymore."
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6. WSJ: China's yuan slides against U.S. dollar 
Drop to 10-month low is largest since revaluation in 2005.
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7. Bloomberg: China’s yuan drops most on record amid band widening speculation 
China’s yuan tumbled by the most on record on speculation the central bank will widen the currency’s trading band, allowing greater volatility at a time when growth is slowing in the world’s second-largest economy. The yuan plunged as much as 0.85 percent to a 10-month low of 6.1808 per dollar in Shanghai, the biggest intra-day drop in China Foreign Exchange Trade System prices going back to 2007. That took it within 0.04 percent of the weak end of its trading band, which limits moves in the spot rate to 1 percent on either side of the central bank’s daily reference rate. The fixing was set at 6.1214, from a 12-week low of 6.1224 yesterday. The People’s Bank of China is expected to double the yuan’s trading band by the end of June, according to the majority of 29 analysts surveyed by Bloomberg, as policy makers loosen exchange-rate controls and promote greater usage of the currency in global trade and finance. Lawmakers will meet next week to decide on major economic policies and an official report tomorrow is forecast to show manufacturing expanded this month at the slowest pace since June.
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8. FT: Beijing guides renminbi lower in effort to manage financial risks 
Move to curb flow of speculative capital in shadow finance market.
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9. Reuters: China's commerce ministry to weigh in on global mergers with new rules 
China's Ministry of Commerce (MOFCOM) plans to issue new draft rules in the first half of this year giving the authority more say in global merger transactions that may have an impact on domestic customers. China is increasingly using antitrust rules to impose conditions on global deals, including the $35 billion merger of Switzerland-based miner Glencore Xstrata PLC (GLEN.L). The ministry has reviewed about 750 merger proposals since the 2008 establishment of China's anti-monopoly law. Of those, MOFCOM blocked one proposal and imposed conditions on 21 others. "If (a merger could) create an anti-competitive impact, we are going to pay attention to it and verify (the deal)," MOFCOM anti-monopoly bureau director general Shang Ming said at a news conference on Thursday. MOFCOM will introduce the rules in the first half of this year, replacing regulations implemented in 2010.
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10. WP - David Ignatius: China’s assertiveness leaves its neighbors anxious 
A Chinese military expert is explaining to a conference here what he sees as the benign inevitability of Beijing’s rising power in the Pacific. “You should trust China,” he says cheerily. “In 10 years, we will be much stronger, and you will feel safer.”  This prediction did not appear to reassure most of the several dozen European and American experts who had gathered for discussions last weekend. Instead, there was a consensus, even among most of the Chinese participants, that Beijing’s growing military power has worried its neighbors and led to friction with Japan, the Philippines and Vietnam over disputed islands and maritime rights. “You think we are a bully,” concedes the Chinese military expert. “We think we are a victim.” But nobody in the room disagreed about the reality that tensions in the Pacific are rising — and that China and its neighbors cannot seem to find a way out. This leaves the United States awkwardly in between, trying to support traditional allies such as Japan without encouraging them to take reckless moves. It is a sign of the times that delegates here talk openly about the danger of war in the Pacific. That’s a big change from the tone of similar gatherings just a few years ago, when Chinese officials often tried to reassure foreign experts that a rising China wasn’t on a collision course with the United States or regional powers. Now, in the East and South China seas, the collision seems all too possible. In the South China Sea, China’s ambitions involve what it calls the “nine-dash line,” which vaguely asserts Chinese maritime claims almost to the coasts of Vietnam, Malaysia and the Philippines. This line has no legal foundation, in the United States’ view, and even the Chinese don’t define just what the line represents. The Philippine government has filed an international arbitration claim challenging the nine-dash demarcation, so perhaps legal limits will be placed on China’s maritime expansion. When Chinese officials meet at international conferences such as the one in Shanghai, they often talk about “win-win cooperation.” It’s a soothing concept, and it has become the elevator music of international meetings. But looking at the Pacific region, it’s hard to see any such spirit of compromise at work.
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11.  NYT - Editorial: China's growing stake in stability 
China’s growing investment in industries worldwide chills those who see in it the specter of a global economic behemoth. But there could be more reason to welcome than fear this new role. By giving China a greater stake in global and regional stability and prosperity, these investments could ease the tensions created by China’s geopolitical activities. China has had a major role in world financial markets for years. But investment in foreign businesses by its public and private companies could soon overtake foreign investment in China, said Shen Danyang, a Commerce Ministry spokesman. Direct investments abroad not only create employment and wealth in the recipient countries, but, if they are large enough, they can bind national economies and political interests, stabilizing relationships. The Lenovo Group, a major computer manufacturer, recently made acquisitions worth more than $5 billion to push into the smartphone business in the United States. The company is based in Beijing but has a hub in Morrisville, N.C. Xu Weiping, the creator of huge business parks in China, is investing $1.6 billion to turn the abandoned Royal Albert Dock in London into the main European hub for Chinese companies. He said more than 60 Chinese businesses had agreed to take space in the development. Chinese investment in Japan has been in the billions for several years, despite tensions over conflicting claims about islets in the East China Sea that some strategic analysts fear could lead to war. But it makes little sense to go to war while increasing investments that could be confiscated during a conflict. Even though China does not seem worried about stirring up this rivalry, further Chinese investment in Japan should motivate China to tone down its aggressiveness out of self-interest. Deepening economic integration can act as a counterweight to international political difficulties. Japanese and European governments should take heart in the flow of Chinese capital that provides the much-needed investment in their current struggles to fight deflation. Conversely, any nationalistic effort to restrict the flow of Chinese capital would heighten anxieties to no one’s benefit.
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12. FT - Joe Biden Oped: We cannot afford to stand on the sidelines of trade 
America should seize the chance to spread our values and benefit our people.
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13. SCMP:  Scorn and gratitude in China for departing US Ambassador Gary Locke 
A Chinese state-run news agency's scathing farewell to US Ambassador Gary F. Locke on Friday stood in stark contrast to well-wishing farewells from many Chinese citizens, who applauded his efforts to raise awareness on air pollution. Locke, 64, is set to leave Beijing on Saturday after two and a half years as the first American ambassador of Chinese descent to the country. His stint was defined by a his frugality, his emphasis on the rule of law in China and his role in granting US asylum to rights activist Chen Guangcheng. In a farewell conference on Thursday, Locke praised the development of economic ties between the two countries, but chastised China for its human rights record. He called on the Chinese government to accept more criticism at home and from abroad. “China should have the national self-confidence to withstand the media scrutiny that most of the world takes for granted,” he said. On Friday, China News Service, the nation’s second biggest news wire after Xinhua, did not mince its goodbye message to the former US Secretary of Commerce who traces his ancestral roots to Jilong, a village in Guangdong province. In a commentary inspired by Mao Zedong's scornful message to Leighton Stuart, the last American ambassador to the Kuomintang government, who left Nanjing in 1949, the news wire said Locke was a "yellow-skinned white-hearted banana man".
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14. SCMP: Chinese worried about more censorship as Xi Jinping heads new web security panel 
News that Chinese President Xi Jinping will take charge of a new panel overseeing internet security and information technology development has sent a shiver down the spines of Chinese media practitioners and net users. Many have expressed fears that the launch of such a high-level task force would deal another blow to press freedom which had already been suffering after Xi's administration tightened controls on the internet in recent months. The panel will oversee and co-ordinate cybersecurity issues and promote IT across various sectors, reported the South China Morning Post. Premier Li Keqiang and propaganda tsar Liu Yunshan, both members of the Communist Party’s Central Politburo Standing Committee, are the group's deputy chiefs. Liu Chun, a media executive with more than two million followers on Weibo, China's answer to Twitter, was among the first to have responded to the news. "The spring of internet has arrived...and my spring has arrived," he announced in a cheerful message which many believed was intended as sarcasm. Liu’s message was reposted over a thousand times, with many of his followers questioning the actual implications of such a steering group. "Is it really spring, or winter that’s coming?" a microblogger wrote.
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15. Xinhua - Editorial: China's economic reform will not follow Jacob Lew's pace 
U.S. Treasury Secretary Jacob Lew, once the housekeeper of the White House, might have overreached his authority by criticizing China's economic reform pace while failing to keep his own country's house in order. Lew said at a conference ahead of a meeting of G20 finance officials last week that he was disappointed with China's pace of economic reform. He called on China to "move at the speed we would want" even at the risk of causing social and political unrest. Lew's concern for China's reform is understandable, but his bossy advice is going too far and proves to be just groundless and self-serving finger-pointing. As the world's largest developing country and the second largest economy, China has contributed a lot to global economic growth thanks to its near double-digit expansion in the past three decades. It has lived up to its international responsibilities with its rapid but steady development, especially during the 2008 financial crisis, which originated from the U.S. China is now at a pivotal point where it must remould its economy, and the leadership has realized the immediacy and showed resolve to kick the GDP-driven growth habit and seek new ways to fuel sustainable development.
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16. Xinhua: China ratifies national days on anti-Japanese war victory, Nanjing Massacre 
China's top legislature today ratified two new national days, one to mark victory of the war against Japanese aggression and the other to commemorate victims in the Nanjing Massacre. September 3 was ratified as the victory day and December 13 the national memorial day for massacre victims, according to two decisions made at the three-day session of the Standing Committee of the National People's Congress which ended on Thursday. In 1951, the Chinese government designated September 3, the next day after the Japanese government officially signed the instrument of surrender in 1945, as the victory day. Japanese troops started the massacre in Nanjing on December 13, 1937, killing more than 300,000 people in the following 40-odd days of atrocities. Lawmakers, political advisors and people from all walks of life have repeatedly proposed setting the two dates as national days.
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17.  WSJ - China Real Time: American ag firms: China is getting tougher 
U.S. agricultural companies are finding it more difficult to do business in China, according to a report by the American Chamber of Commerce in China published on Thursday. While the government has raised hopes of reducing bureaucracy and allowing more competition in cloistered sectors of the economy, some of the chamber’s members are worried that things are going the other way. New rules in 2011 imposed restrictions on foreign involvement in areas like seed production, grain storage, corn processing, and biotech research. U.S. beef exporters are frustrated that they have been banned from the Chinese market since an outbreak of bovine spongiform encephalopathy, also known as mad-cow disease, in the U.S. a decade ago. U.S. poultry is also subject to “prohibitively high” tariffs, AmCham said. China’s Ministry of Agriculture didn’t immediately respond to a request for comment. In many ways China has been good to the U.S. agriculture industry. Its corn imports recently reached a new monthly high, with the U.S. still supplying most. It is also a major importer of U.S. soybeans, as China edges away from its long-held emphasis on self-sustaining domestic crop production. China is now the U.S.’s leading destination for agriculture exports, with shipments rising to nearly $26 billion in 2012 from $5 billion in 2003, according to the US Department of Agriculture. AmCham says U.S. companies can offer more: not just meat and grain exports, but also technology and know-how that could revolutionize Chinese farming.

A farmer dries newly harvested corn cobs near her field in Zhuliang village of Qingzhou, Shandong province. Reuters
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18. Bloomberg: China’s subsidies end prompts forecasts for slower growth 
Chinese carmaker BYD Co. (1211) may be getting some bad news as it prepares to start selling in the U.S. next year. A planned reduction in government subsidies and a phase-out of interest-rate controls threaten to raise costs for it and thousands of companies across China. Less than a decade after surging wages began forcing manufacturers to cheaper countries, President Xi Jinping is preparing to dismantle a web of subsidies that began under Deng Xiaoping in the 1980s. The measures could slow average annual growth to as low as 3 percent through 2022 from 10 percent in 2010. They also will mean higher prices for capital, land and water and swings in the cost of energy, potentially squeezing indebted state businesses. Among those with “highly leveraged” financial profiles are power producer Huaneng Power International Inc. (902) and China Shipping Development (1138) Co., according to a Sept. 2013 report by ratings company Standard & Poor’s. Societe Generale SA says as many as half of China’s steelmakers may have to shut down. Farther away, Australian iron producers such as Fortescue Metals Group Ltd. (FMG), which derives almost 100 percent of its revenue from China, could see lower profits. “It is going to cause very substantial stress, particularly among state-owned enterprises,” said Nicholas Lardy, author of “Sustaining China’s Economic Growth After the Global Financial Crisis.” “These guys will have to up their game or sell assets if they can’t improve their performance, or eventually go out of business.”
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19. Bloomberg: China shifts APEC finance meeting to Beijing from Hong Kong 
China has shifted a meeting of Asian finance ministers set for September to Beijing from Hong Kong, saying the move would improve planning for a leaders summit later this year. The change of location is to facilitate logistics arrangements and ensure coordination for the annual Asia-Pacific Economic Cooperation summit, the Hong Kong government said in a statement yesterday. Beijing’s change of mind comes just five months after agreeing to let Hong Kong, the nation’s financial center, run the event. The city is locked in a debate over reforms needed to bring in universal suffrage in 2017, with a group known as Occupy Central pledging protests this year if the electoral changes fail to meet its expectations. “I don’t think there’s any other way to read it than a political reaction” to the threat of protests, said Michael Degolyer, a political scientist at the Hong Kong Baptist University. The APEC meeting “would be a juicy target.”
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20. FT: China falls out of love with cash
China is rapidly ditching the centuries-old habit of paying its bills with trunkloads of cash, and making the shift to virtual forms of payment faster than any other country on earth.  Figures released by the People’s Bank of China show a sharp rise in the popularity of anything other than cash – from debit cards to credit cards to electronic wallet mobile apps. China has a staggering 4.2bn bank cards in circulation – enough for every mainlander to have at least three. Ten times more of them are debit cards than credit cards (3.8bn compared to 391m), but credit card issuance also rose by 19 per cent in 2013, and Euromonitor predicts credit card usage will grow faster than that of other cards over the next five years. Overdue credit card debt – unpaid after six months – also leapt 72 per cent, but this is hardly US-style household debt: China’s overdue credit card debt is a mere 1.37 per cent of total credit outstanding. The shift away from cash is remarkable for a country which was the first to print paper money a millennium ago: until recently, cash was so popular in China that even large purchases like cars or houses were paid for with bundles of banknotes bearing the portrait of Mao Zedong. Very low rates of street crime make China, paradoxically, one of the safest countries for carrying around large wads of cash. And decades of deprivation coupled with an only rudimentary social safety net have left older Chinese with an almost pathological fear of debt – and a fondness for holding their wealth in their hands.

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21. Reuters: China paves way to charge ally of former security tsar in graft crackdown 
A former vice minister of public security and ally of China's retired domestic security chief, Zhou Yongkang, has resigned from his position as a national lawmaker, state media said, possibly opening the way for criminal charges against him. Li Dongsheng was formally sacked this week after being suspended last December for suspected "serious discipline violations", a term normally used to refer to corruption. The news comes as speculation intensifies about the country's former domestic security tsar Zhou, one of the most powerful politicians of the last decade. China's parliament - whose annual session opens in Beijing next week - has accepted Li's resignation as a member of parliament for southwestern Sichuan province, the official Xinhua news agency said late on Thursday. It did not give a reason, but the move removes Li's immunity from prosecution as a member of the largely rubber-stamp body. Li could not immediately be reached for comment.
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22. Diplomat: New report could offer clues to Hillary Clinton’s China policy
A new report on US-China relations could provide insight into what Hillary Clinton’s China policy would be as president.

State Department photo.
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23. Atlantic - James Fallows: Happy and unhappy in China 
Laughing through the airpocalypse, no longer laughing at a familiar joke. In the largest sense, "sustainability" is obviously the challenge for any society or economic system. But in a very immediate way, environmental sustainability is by far the largest and most urgent challenge for China. The country's blackened skies, poisoned lands and waters, and untrustworthy food are a public health menace; they are an emerging political threat to the government; they are the main challenge that China's rise creates for the world as a whole. On the other hand: yesterday the latest offering from the state-controlled China Daily arrived inside the WaPo at our house. I've always joked that the China Daily was my favorite newspaper, because it so often rivals The Onion in the earnest preposterousness of its views.  The joke is wearing off for me, because of the crackdown on international and domestic reporters underway this past year in China. It's harder and harder for outsiders even to get visas there. (On my latest trip three months ago, I got no word about my visa until literally the day before departure, and this for a gathering that the Chinese government itself had authorized. The visa was for a single entry only, and ten days' stay.) It's riskier for domestic reporters to look into "sensitive" matters, above all involving the personal fortunes of the rulers' families. Last month, civil-society advocates in Hong Kong were alarmed when the editor of a leading independent newspaper there, Kevin Lau of Ming Pao, was fired after his paper had undertaken some muckraking investigations of the mainland leadership. A few days ago in Hong Kong he was stabbed, in a still-unexplained but ominous attack. 
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24. Pew: The Web at 25 in the U.S. 
The overall verdict: The internet has been a plus for society and an especially good thing for individual users.
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